IGI Logo

India growth drives steady numbers…

About the stock: Incorporated in 1959, Torrent has a strong presence in domestic and semi-regulated markets and a growing presence in regulated markets.

* Revenues – India including CRAMs (53%), Brazil (8%), US (16%) and Germany (13%).

* Torrent is the eighth largest domestic player and is ranked in top 10 for CVS, CNS, V&M, GI and anti-diabetes therapies in India

Q1FY22 Results: Torrent reported steady Q1FY22 results.

* Sales were up 3.8% YoY to | 2134 crore

* EBITDA in Q1FY22 was at | 677 crore, up 2% YoY with margins at 31.7%

* Consequent PAT was at | 330 crore (up 2.8% YoY)

What should investors do?

Torrent’s share price has grown by ~2.1x over the past five years (from ~| 1372 in June 2016 to ~| 2901 levels in June 2021).

* We change our rating from BUY to HOLD on the stock given recent run up

Target Price and Valuation: We value Torrent at | 3250 i.e. 32x P/E on FY23E EPS.

Key triggers for future price performance:

* In India, Torrent is expected to increase specialty focus & new introductions to leverage patent expiry. Also, it forayed into fast growing trade generic segment for acute therapies

* Expects double digit growth in branded markets and high single digit in Germany

* Awaiting clearance for Dahej and Indrad facility from USFDA

Alternate Stock Idea: Apart from Torrent, in healthcare coverage we like Sanofi

* A strong growth track in top brands, measured new launches (including innovative launches) besides strong balance sheet and comfort on corporate governance front are some key attributes of Sanofi

* BUY with a target price of | 9750

To Read Complete Report & Disclaimer Click Here

For More ICICI Securities Disclaimer https://www.icicisecurities.com/AboutUs.aspx?About=7

Above views are of the author and not of the website kindly read disclaimer