Buy Torrent Pharmaceuticals, target price Rs 1769: ICICI Securities

ICICI Securities has buy call on Torrent Pharmaceuticals with a target price of Rs 1769. The current market price of Torrent Pharmaceuticals is Rs 1541.

Torrent Pharmaceuticals Ltd., incorporated in the year 1972, is a Large Cap company (having a market cap of Rs 52086.75 Crore) operating in Pharmaceuticals sector.

Torrent Pharmaceuticals Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue and Export Incentives for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2377.00 Crore, up 8.69 % from last quarter Total Income of Rs 2187.00 Crore and up 9.34 % from last year same quarter Total Income of Rs 2174.00 Crore. Company reported net profit after tax of Rs 354.00 Crore in latest quarter.

Investment Rationale
The brokerage is positive on the stock mainly due to its strong branded chronic franchise in both India and Brazil. Plant clearance in the US followed by new launches may support growth. Maintain BUY with a revised target price of Rs1,769/share based on 19xFY24E EV/EBITDA (earlier: Rs1,771/share based on 19xFY24E EV/EBITDA). In spite of the increase in EBITDA, additional debt that is being procured for the transaction will is the key reason for the decline in TP. Key downside risks: Slowdown in domestic growth and forex volatility.

Promoter/FII Holdings
Promoters held 71.25 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.94 per cent, DIIs 7.86 per cent.