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Last Updated : Jan 28, 2020 11:04 AM IST | Source: Moneycontrol.com

Torrent Pharma share price falls 5% on weak Q3 nos; Credit Suisse, CLSA retain buy

CLSA maintains outperform call on the stock and raised the target to Rs 2,050. Credit Suisse, too, stuck to outperform call but with the target at Rs 1,700.

 
 
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The share price of Torrent Pharma was down almost 6 percent in the morning trade on January 28 after the company reported a weak set of December quarter numbers.

The company reported a 2.03 percent rise in its consolidated net profit to Rs 251 crore for the quarter against Rs 246 crore for the corresponding period previous fiscal, Torrent Pharmaceuticals said in a BSE filing.

Consolidated revenue from operations stood at Rs 1,966 crore. It was Rs 2,051 crore for the year-ago period.

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Net sales declined by 1.2 percent to Rs 1,924 crore in the quarter from Rs 1,948 crore in December 2018.

Torrent Pharma's revenue from the India business grew 5 percent YoY to Rs 871 crore. Brazil revenues went up 12 percent YoY to Rs 189 crore, while those of the US were down 22 percent to Rs 381 crore. Germany revenues stood at Rs 219 crore, down by 18 percent.

The stock witnessed spurt in volume by more than 1.24 times and was quoting at Rs 1,928.20, down Rs 98.65, or 4.87 percent. It has touched an intraday high of Rs 2,022 and an intraday low of Rs 1,925.05.

Despite a weak set of Q3 numbers, global research firms Credit Suisse and CLSA maintained an outperform rating on the stock.

Credit Suisse set target at Rs 1,700 per share.

The company reported a weak quarter in both India and Germany, with EBIT miss at 2 percent as cost was lower due to rationalisation of field force.

The brokerage expects growth to pick up in the next quarter, aided by three new launches. Key for the stock will be whether the company can revert to 11-12 percent growth trajectory, it added.

Research firm CLSA has also maintained outperform call on the stock and raised target to Rs 2,050 from Rs 1,950 per share.

It is of the view that India is likely to remain the key growth driver. India growth was weak at 5 percent due to one-offs linked to stockists, while supply-chain issues with respect to the EU should be resolved by March, it said.

US revenue was flat QoQ and will likely decline in FY21. The US FDA issues at its key manufacturing sites will take time to resolve. CLSA believes that India will be a key medium-term growth driver and raised FY20 EPS estimates by 3 percent.

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First Published on Jan 28, 2020 11:04 am
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