Hold Torrent Pharma; target of Rs 1560: Religare

TRP has significantly stepped up its R&D spends in FY16 (+62% YoY; 2x of FY14 spends) led by investments in oncology, dermatology, ophthalmic, biosimilars and respiratory segments, as well as NDDS projects (long acting injectables, nasal sprays, oral dispersible films and foams). The company has expanded its scientist pool by 29% YoY (868 scientists) – the highest increase in recent years. We have been cautious on TRP primarily due to its low R&D spends and a weak US pipeline, and thus an enhanced R&D focus is encouraging. TRP expects R&D spends to further increase by 200bps-400bps in FY17 (4% in FY16).

We recommend HOLD rating on Torrent Pharma with a target price of INR 1560.For all recommendations, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.