Torrent Pharma Q1 Results Review- Segment Continues To Drive Growth: Centrum

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Centrum Report.Torrent Pharmaceuticals Ltd. Q1 FY25 revenue/Ebitda were in-line while profit after tax was a miss on our estimates. Overall sales were Rs 28.6 billion (+10% YoY) for the quarter. This was led by India/Germany segments delivering 15%/10% YoY growth respectively.However, Brazil grew a modest 3% YoY and U.S declined 12% YoY (CC: -9% YoY). Adjusting for a one-off expense of Rs 0.2 billion, Ebitda was Rs 9.2 billion (+17% YoY) with margins expanding 180bp YoY to 32.3% (our estimate 31.6%), due to better gross margin (+80bp YoY) and lower opex (down ~100bp YoY as % of sales).Adjusted profit after tax grew 26% YoY to Rs 4.8 billion (our estimate Rs 5.2 billion) driven by lower finance costs (down 25% YoY) offset by lower other income (down 29% YoY) and higher tax rate of 29.4% (versus 28.8% in Q1 FY24).Over FY24-26E, we expect India sales to witness 16% compound annual growth rate led by continued outperformance over IPM. Also, we expect Brazil/Germany/US segment to witness 13%/10%/9% compound annual growth rate.Additionally, we expect Ebitda margins to expand 220 bp to reach 33.6% in FY26. The Effective tax rate in FY25/FY26 is expected to be 30%/26% respectively. Accordingly, we have revised our FY25/FY26 earnings estimates by -4%/8%.We value Torrent Pharma at 37 times FY26E earning per share to arrive at a target price of Rs 3,350. However, we see majority of the positives being already factored in the current price. Downgrade to 'Add'..Click on the attachment to read the full report:.Budget 2024: Gold Prices In India Fall After Cut In Customs Duty.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Torrent Pharma Q1 Results Review- Segment Continues To Drive Growth: Centrum

The brokerage sees majority of the positives being already factored in the current price, hence downgrade to Add.

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