Retain ‘add’ on Torrent Pharma with TP at Rs 2,940

India development robust, US underperforms: India enterprise grew 9.8% vis-a-vis 5.0% development within the business.

Torrent Pharma’s (Torrent) Q4FY21 efficiency was higher than estimates on Ebitda and PAT led by higher gross margin and better different revenue. Income declined 0.5% y-o-y to Rs 19.4 billion with worldwide markets declining 7.7% offset by 9.8% development in home market.

US gross sales declined 5.9% q-o-q to $37 million vs estimated $40 million. Higher income combine led to gross/ Ebitda margin enchancment of 150/180 bps y-o-y. Adjusted PAT grew 24.1% to Rs 3.2 billion, pushed by higher margin and better different revenue.

We’re optimistic on the long-term outlook contemplating development enchancment in India enterprise with persistent phase dominance, potential decision of OAI/WL standing at two amenities in FY22E, EPS CAGR of 17.0% over FY21-FY23E and strengthening stability sheet with bettering FCF technology. Retain ‘add’ with a revised goal worth of Rs 2,940/share.

India development robust, US underperforms: India enterprise grew 9.8% vis-a-vis 5.0% development within the business. Firm ought to proceed to outpace business when it comes to development contemplating its vital publicity to the persistent phase and established product portfolio.

US revenues declined 5.9% q-o-q to $37 million as a consequence of worth erosion and absence of latest launches given USFDA points. We anticipate US gross sales to enhance hereon led by new launches from third social gathering manufacturing and restart of Levittown facility.

Brazil revenues declined 3.6% y-o-y as a consequence of foreign money depreciation regardless of fixed foreign money development of 19.0%. Germany revenues grew robust 23.6% y-o-y (14.0% in fixed foreign money). ROW and CRAMS companies have been weak in Q4FY21 and reported decline in income.