Buy Torrent Pharmaceuticals; target of Rs 1900: Prabhudas Lilladher

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Prabhudas Lilladher's research report on Torrent Pharmaceuticals

Torrent Pharma’s (TRP) 4QFY23 EBITDA was largely in line, however PAT was below our estimate led by higher tax and one-time inventory write off. 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.

Outlook

Also 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 with revised TP of Rs 1,900/share (Rs 1,820 earlier), 17x EV/EBITDA to FY25E.

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Torrent Pharmaceuticals - 30 -05 - 2023 - prabhu