Synopsis: Torrent Pharmaceuticals' shares rose by 8.70 percent to Rs. 2,839.90 following strong Q4 results, bringing the market capitalization to nearly Rs. 95,000 crore. The company reported a 57 percent YoY increase in consolidated net profit to Rs. 449 crore and a 10 percent YoY rise in revenue to Rs. 2,745 crore. EBITDA grew by 21 percent to Rs. 883 crore.
Torrent Pharmaceuticals' shares rose by 8.70% to Rs. 2,839.90 on Monday, resulting in a total market capitalization of nearly Rs. 95,000 crore.
During Monday's trading session, shares of Torrent Pharmaceuticals Ltd climbed about 9 percent to reach new 52-week highs, following the company's strong performance for the quarter ending in March 2024.
Despite this, brokerage firms remained largely neutral on the stock as the results met expectations.
Torrent Pharma reported a 57 percent year-on-year (YoY) increase in consolidated net profit for the March quarter, amounting to Rs. 449 crore, up from Rs. 287 crore in the same period last year.
Revenue from operations grew by 10 percent YoY to Rs. 2,745 crore, while EBITDA for the quarter rose 21 percent YoY to Rs. 883 crore.
The board also recommended issuing equity shares, including convertible bonds/debentures through qualified institutional placement (QIP) or other methods, up to Rs. 5,000 crore.
Additionally, a final dividend of Rs. 6 (120 percent) per share was recommended to the members.
Following the earnings announcement, Torrent Pharmaceuticals' shares jumped 8.70 percent to Rs. 2,839.90 on Monday, bringing the market capitalization close to Rs. 95,000 crore.
The stock had closed at Rs. 2,612.05 in the previous session on Friday.
Torrent Pharma's Q4 FY24 performance aligned with expectations, driven by strength in all markets except the US.
Kotak Institutional Equities noted a 220 basis points EBITDA margin expansion forecast over FY2024-27E to 33.6 percent, influenced by price hikes and continued operating leverage in branded and generic segments.
They maintained a reduced rating with a revised fair value of Rs 2,575 per share, citing no immediate M&A plans but ongoing potential for domestic acquisitions due to strong free cash flow generation.
Antique Stock Broking highlighted that Torrent Pharma's branded India formulations business grew by 10 percent, boosted by price increases, top brands, new launches, and the consumer health portfolio.
Brazil formulations saw an 11 percent YoY growth, driven by new launches and improved volumes.
They project a 13 percent CAGR revenue growth over two years and increased their EBITDA margin assumption to 35 percent, with a revised target price of Rs. 3,244 and a 'buy' recommendation.
JM Financial mentioned that Torrent Pharma expects domestic business to grow 2-3 percentage points ahead of IPM, led by top brands' performance, higher field force productivity, and consumer scale-up, with 7-8 percent price hikes offsetting soft volume growth.
They maintained a 'hold' rating with a March 2025 target price of Rs. 2,520, noting upcoming product launches in Brazil and growth in Germany.
Motilal Oswal Finance Services pointed out that despite subdued US performance, superior growth in Latin America and ROW markets led to a 27 percent YoY earnings growth for FY24, supported by better-than-industry growth in the branded generics segment and a 190 basis points margin expansion.
They valued Torrent Pharma at 32 times forward earnings with a TP of Rs. 2,575, maintaining a 'neutral' stance due to high valuations and pending US business recovery.
In summary, Torrent Pharmaceuticals experienced a significant share price increase of 8.70 percent, reaching Rs. 2,839.90, driven by strong Q4 results.
Despite the robust performance, brokerage firms largely maintained neutral ratings as the results met expectations.
The company's consolidated net profit rose 57 percent YoY to Rs. 449 crore, and revenue grew by 10 percent YoY to Rs. 2,745 crore.
The board recommended issuing equity shares up to Rs. 5,000 crore and a final dividend of Rs. 6 per share.
Analysts highlighted continued growth prospects in the domestic market and key international regions, although high valuations and pending US market recovery tempered some expectations.
Investors are advised to consult with financial advisors for tailored investment decisions.
Disclaimer: We provides stock market news for informational purposes only and it should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Related Questions
1. What was the percentage increase in Torrent Pharmaceuticals' shares on Monday?
Torrent Pharmaceuticals' shares rose by 8.70% on Monday.
2. What was Torrent Pharmaceuticals' market capitalization after the share increase?
After the share increase, Torrent Pharmaceuticals' market capitalization was nearly Rs. 95,000 crore.
3. How did brokerage firms respond to Torrent Pharmaceuticals' performance?
Brokerage firms remained largely neutral on Torrent Pharmaceuticals' stock as the results met expectations.
4. What was the YoY increase in Torrent Pharmaceuticals' consolidated net profit for the March quarter?
Torrent Pharmaceuticals reported a 57% year-on-year increase in consolidated net profit for the March quarter.
5. What growth did Torrent Pharmaceuticals see in revenue from operations?
Revenue from operations grew by 10% year-on-year.
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