We cut our FY24E/25E EBITDA by 6%/3% to factor in lower US sales given recent OAI status to its Indrad unit along with higher interest cost. Torrent Pharma’s (TRP) 3QFY23 EBITDA was largely in line, however PAT was below our estimate led by forex loss and higher interest cost. TRP has Rs 70bn (75% of total sales) worth of highly profitable branded formulation sales spread across India, Brazil and RoW markets. In the near term, Curatio acquisition will increase the company’s net debt and we see this acquisition as EPS dilutive.
OutlookAlso historically TRP has successfully managed to integrate Unichem and Elder acquisition which gives us comfort. We expect 17% EBITDA CAGR over FY23-25E. Maintain‘ BUY’ rating at TP of Rs 1,820/share, 17x EV/EBITDA to Dec 2024E.
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