Q3FY24 Review: Torrent Pharmaceuticals: Steady performance across all parameters

5 Feb 2024 , 02:28 PM

Torrent Pharmaceuticals (Torrent)’s Q3 performance was steady across all fronts, with revenue growth of 12%/16% cc over the year-ago quarter in India/Brazil and EBITDA margin expansion of ~80 basis points sequentially to ~32%. With 40% organic expansion in India rep team over FY22-24, Torrent’s execution in new launches in the domestic market has been strong. This, along with scale-up in TGx and CHL portfolio, has allowed Torrent to outperform IPM volume growth. Brazil business has also benefited from 3-4 BGx launches p.a. over the past 3 years and Torrent is targeting to add new divisions of Derma/Oncology to its Brazil business over the next few years. 

With low-double-digit growth in India/Brazil business, US launches expected to pick-up from Q1FY25 and Balance Sheet deleveraging, analysts at IIFL Capital Services expect Torrent to deliver 13/22% EBITDA/EPS CAGR over FY24-27. They have tweaked their FY25/26 EPS estimates by 0-1% and have maintained their Buy rating on Torrent. Target Price of ₹2,840 (pegged at ~23x FY26 estimated EBITDA) implies 13% upside.