Q1 revenues grew 1.7% YoY to Rs. 2056 crore (I-direct estimate: Rs. 2063 crore) mainly due to muted domestic sales amid Covid-19, which grew 2.0% YoY growth to Rs. 925 crore. US formulations de-grew 0.8% YoY to Rs. 373 crore due to base business price erosion and lack of new launches. Rest of world (RoW) markets grew 33% YoY to Rs. 234 crore. EBITDA margins expanded 539 bps YoY to 32.1% (I-direct estimate: 27.0%) mainly due to change in product mix and lower travel & promotional spends. EBITDA grew 22.2% YoY to Rs. 661 crore (I-direct estimate: Rs. 557 crore). PAT grew 48.6% YoY to Rs. 321 crore (I-direct estimate: Rs. 245 crore). Delta vis-à-vis EBITDA was mainly due to lower tax rate and interest cost.
Valuation & Outlook
Overhang pertaining to two US focused plants notwithstanding, Torrent continues to impress thanks to its robust margin profile, which can be attributed to global portfolio that comprises ~60% branded generics. We expect a further improvement in this matrix and product rationalisation to further strengthen margins. The company's portfolio is finely balanced between India, Brazil, Germany and the US with Indian being the leader. With consistent FCF generation and moderation in core capex, we expect the leverage situation to improve substantially. With these key characteristics we believe the premium valuation is justified. We upgrade to BUY with a revised target price of Rs. 2865 (30x of FY22E EPS of Rs. 95.5).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TorrentPharma_Q1FY21.pdf
Shares of TORRENT PHARMACEUTICALS LTD. was last trading in BSE at Rs.2662.7 as compared to the previous close of Rs. 2436.85. The total number of shares traded during the day was 189436 in over 15676 trades.
The stock hit an intraday high of Rs. 2754.9 and intraday low of 2500. The net turnover during the day was Rs. 506486755.