Buy Torrent Pharmaceuticals; target of Rs 2700: Sharekhan

Sharekhan's research report on Torrent Pharmaceuticals

Torrent Pharma’s IPM data showed healthy growth of 19.7% and 8.20% for the month of Oct’23 October 2023 and November 2023. Torrent’s Shelcal brand sales crossed Rs 600 crores and climbed to 40th position in the IPM. Dahej plant received EIR from the USFDA, so it will start receiving approvals for pending ANDAs and would be able to launch new products in the US market. Germany business is expected to recover in 2HFY2024E with double-digit growth rate. led by strong execution of the tender win. We factor in Dahej plant’s clearance to increase US sales by FY2026E, continuous double-digit IPM growth in the base business, and Curatio Synergies to aid in retaining EBITDA margin above 30%.

Outlook

We upgrade Torrent Pharma to BUY with a PT of Rs. 2,700.