Neutral on Torrent Pharma, target price Rs 2510: Motilal Oswal

Motilal Oswal has given a neutral rating to Torrent Pharma with a target price of Rs 2510. The share price moved down by 2.71 per cent from its previous close of Rs 2654.45. The stock’s last traded price is Rs 2582.45.

Torrent Pharmaceuticals Ltd., incorporated in the year 1972, is a Large Cap company (having a market cap of Rs 43810.92 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 2014.00 Crore, up 5.33 % from last quarter Sales of Rs 1912.00 Crore and up 1.92 % from last year same quarter Sales of Rs 1976.00 Crore Company reported net profit after tax of Rs 321.00 Crore in latest quarter.

Investment Rationale
The brokerage expects a 31% earnings CAGR, led by a 9%/7% sales CAGR in DF/US over FY20-23, ~300bp margin expansion, and reduced financial leverage. However, it maintains neutral as the current valuation adequately factors in the earnings upside.

Promoter/FII Holdings
Promoters held 71.3 per cent stake in the company as of Sept 30, 2020, while FIIs held 12.2 per cent, DIIs 8.4 per cent and public and others 8.1 per cent.