Buy Torrent Pharmaceuticals, target of Rs 1788: Sharekhan

Sharekhan's research report on Torrent Pharmaceuticals

Torrent Pharmaceuticals Limited (Torrent) posted strong revenue growth (after including Curatio’s acquisition). As a result, the company outperformed our revenue estimates. However, the result was in line on the operating front; but performance was far below the expectations on PAT basis. Revenue growth was driven by strong growth across markets. Management has guided that Brazil market will lead growth and Germany should have a steady sequential recovery in the short-medium term. Also, outlook in the US depends on its ability to bring in new products in the market.

Outlook

We maintain our Buy rating on Torrent Pharma with a revised PT of Rs. 1,788, as we believe while the subdued outlook on the US with two of its facilities being under OAI by the USFDA can restrict robust product launches, strong growth outlook on India market and Brazil expected to outperform the industry growth should drive its earnings at a better trajectory than estimated before.