ICICI Securities research report on Torrent Pharma
Torrent’s Q1FY24 performance was boosted by the acquisition of Curatio in India, while delay in shipments derailed growth in Brazil (sales of ~INR 250mn in Q1). Organic growth in domestic branded biz is estimated at ~8-9% led by price rise and new launches. Lower share of CDMO sales (5.1% in Q1 vs 6.6% last year) and soaring India contribution (55% in Q1 vs 53%) drove 300bps YoY (320 bps QoQ) expansion in gross margin to 74.9%. It aims to file 7-9 products in the US every year and launch 10-12 products (incl. oncology), which will likely increase US quarterly sales run-rate to USD 50mn-60mn in a few years.
Outlook
While we like Torrent’s niche focus on branded generics, the stock trades at a pricey 22x / 19x FY24E / FY25E EV/EBITDA. Maintain HOLD with a revised TP of INR 2,130 on 20x FY25E EV/EBITDA.
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