Prabhudas Lilladher's research report on Torrent Pharmaceuticals
Torrent Pharma’s (TRP) has Rs 70bn (75% of total sales; including Curatio) worth of highly profitable branded formulation sales spread across India, Brazil and RoW markets. In the near term, Curatio acquisition will increase TRP’s net debt and we see this acquisition as EPS dilutive. Post factoring in Curatio acquisition, our EPS for FY23 and FY24 stands reduced by ~5%. However, the deal is a strategic fit for TRP, given that it gives presence in high growing cosmetic derma segment and can enhance profitability of Curatio portfolio with cost synergies, geographical expansion and price hike as well as accelerate the topline growth. Historically TRP have managed to integrate successfully Unichem and Elder acquisition which gives us comfort.
We expect 18% EBITDA and 19% EPS CAGR over FY22-25E. Maintain ‘BUY’ rating with revised TP of Rs 1,850/share (Rs1,750 earlier), 17x EV/EBITDA as we roll forward to Sept 2024E.
At 16:01 hrs Torrent Pharmaceuticals was quoting at Rs 1,493.20, down Rs 40.40, or 2.63 percent.
It has touched an intraday high of Rs 1,502.00 and an intraday low of Rs 1,449.25.
It was trading with volumes of 39,819 shares, compared to its thirty day average of 12,761 shares, an increase of 212.03 percent.
In the previous trading session, the share closed up 1.30 percent or Rs 19.70 at Rs 1,533.60.
The share touched its 52-week high Rs 1,652.23 and 52-week low Rs 1,242.50 on 31 December, 2021 and 12 May, 2022, respectively.
Currently, it is trading 9.63 percent below its 52-week high and 20.18 percent above its 52-week low.
Market capitalisation stands at Rs 50,536.67 crore.
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