Buy Torrent Pharmaceuticals; target of Rs 2982: Geojit

Geojit's research report on Torrent Pharmaceuticals

Torrent Pharmaceuticals Limited engages in the research, development, manufacturing, and marketing of generic pharmaceutical formulations in India, the United States, Germany, Brazil, and internationally. The company offers products in various therapeutic areas. In Q2FY21, revenue remained flattish (+ 0.6% YoY), largely impacted by decline in the US (-13.9% YoY) and Brazil markets (-17.3% YoY), whereas India, Germany and RoW continued to perform well. R&D expenses fell 8.5% YoY to Rs. 119cr (vs. Rs. 130cr in Q2FY20). EBITDA rose 17.4% YoY to Rs. 635cr, with EBITDA margin expanding 450bps to 31.5%, owing to lower other operating expenses and change in products mix. Further, PAT increased 27.0% YoY, further aided by lower interest expenses. We have a positive view on the stock as the company is set to benefit from robust growth in the Indian and German markets.

Outlook

Hence, we upgrade our rating on the stock to BUY with a revised target price of Rs. 2,982 based on 34x FY22E adj. EPS.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More