Anand Rathi's research report on Torrent Pharmaceuticals
With good growth in its brand-name business (India, Brazil, RoW) but counter-balanced by weak sales in Germany, Torrent’s Q3 revenues grew 18% y/y to Rs24.9bn. Adj. for one-time over-absorption of expenses, the gross margin was steady at 71-72%. Even as the EBITDA margin was a sturdy 29%, higher interest and depreciation costs dragged profits to Rs2.8bn. On the good traction in its brand-name generics through launches, market-share gains and greater MR productivity, we expect 11%, 15% and 21% CAGRs over FY22-25 in respectively revenue, EBITDA and PAT.
We retain a Buy rating on the stock, at an unchanged TP of Rs.1,915 (18x FY25e EV/EBITDA).
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