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Motilal Oswal Report
Torrent Pharmaceuticals Ltd. delivered an in-line operating performance in Q3 FY24. Healthy Ebitda growth of 18% YoY was driven by superior growth in domestic formulation and LatAm.
The lack of approvals and marginal price erosion in base business in the U.S. affected the overall performance to some extent.
We marginally lower our FY24 estimate by 3% to factor in lower other income. We maintain our estimates for FY25/FY26. We value Torrent Phram at 30 times 12 months forward earnings to arrive at a target price of Rs 2,540.
Torrent Pharma continues to build levers for its branded generics segment in DF/LATAM through a focused approach on existing brands, selective/differentiated product launches, and the addition of MRs to expand reach.
Further, it is also gearing up for launches in the U.S. generics segment from its Dahej site. Tender wins are improving its growth prospects in Germany as well.
Accordingly, we expect a 30% earnings compound annual growth rate over FY24-25. Having said this, the valuation largely factors in this upside in earnings. Retain 'Neutral' on the stock.
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