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Prabhudas Lilladher Report
Torrent Pharmaceuticals Ltd. has Rs 70 billion (75% of total sales; including Curatio Healthcare Pvt. Ltd.) worth of highly profitable branded formulation sales spread across India, Brazil and rest of world markets.
In the near term, Curatio acquisition will increase Torrent Pharma's net debt and we see this acquisition as earning per share dilutive. Post factoring in Curatio acquisition, our EPS for FY23 and FY24 stands reduced by ~5%.
However, the deal is a strategic fit for the company, given that it gives presence in high growing cosmetic derma segment and can enhance profitability of Curatio portfolio with cost synergies, geographical expansion and price hike as well as accelerate the topline growth.
Historically Torrent Pharma have managed to integrate successfully Unichem and Elder acquisition which gives us comfort.
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