Sharekhan's research report on Torrent Pharmaceuticals
Torrent Pharma posted mixed results for Q4FY23, as while it outperformed on the sales front due to stronger growth in India, Brazil and Germany markets than anticipated it underperformed on net income basis due to lower other income and higher interest costs than anticipated. Revenue growth was driven by strong growth across markets; partially offset by the weakness in the US market. The existing base business in the US is witnessing decline due to huge price erosions without additional product launches.
Outlook
Hence, we downgrade the stock to HOLD as all the potential margin expansion and strong revenue growth prospects are already factored in, in the prices. The stock is currently trading at ~34.0x/29.2x its FY24E and FY25E EPS, which is at a premium to the historical multiples it has traded at.
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