Buy Torrent Pharma; target of Rs 687: Firstcall Research

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Buy Torrent Pharma; target of Rs 687: Firstcall Research

Firstcall Research is bullish on Torrent Pharma and has recommended buy rating on the stock with a target of Rs 687 in its September 10, 2011 research report.

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Firstcall Research is bullish on Torrent Pharma and has recommended buy rating on the stock with a target of Rs 687 in its September 10, 2011 research report.

"The flagship company of Torrent group, Torrent Pharmaceuticals Limited, is a dominant player in the therapeutic areas of cardiovascular (CV) and central nervous system (CNS) and has achieved significant presence in gastro-intestinal, diabetology, anti-infective and pain management segments. Torrent Pharmaceuticals Limited engages in the manufacture and sale of branded and unbranded generic pharmaceutical products in India and internationally. In the International operations arena, Torrent Pharma exports to more than 50 countries around the world with over 1000 product registrations. The international business has been broadly divided into five zones- USA, Latin America, Russia and CIS, Western Europe and CEE and Rest of the World (ROW). For its export excellence in International Business, Torrent Pharma has won several prestigious export awards."

"Torrent Pharmaceuticals announced increase in consolidated net sales for the quarter ended June 30, 2011. During the quarter, the net sales of the company rose 19.68% to Rs.6474.90 million from Rs.5410.00 million in the same quarter previous year. Net profit for the quarter June 30, 2011 is increased by 38.13% to Rs. 1025.20 million from Rs. 742.20 in same quarter previous year. Total income for the quarter rose 19.64% to Rs. 6499.30 million, when compared with the prior year period. It reported earnings of Rs. 12.12 a share during the quarter, registering 38.13% increased over prior year period."

"At the current market price of Rs.608.00, the stock is trading at 15.81 x FY12E and 13.76 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.38.48 and Rs.44.22 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 17% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 10.64 x for FY12E and 9.33 x for FY13E. Price to Book Value of the stock is expected to be at 3.82 x and 2.99 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs.687.00 for Medium to Long term investment," says Firstcall Research report.

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To read the full report click on the attachment