12 TORNTPHARM share price target reports by brokerages below. See what is analyst's view on TORNTPHARM share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
One–offs and subdued US due to regulatory hurdles impacted revenues. Overhang pertaining to two US focused plants notwithstanding, Torrent continues to impress thanks to its robust margin profile, which can be attributed to global portfolio that comprises ~60% branded generics. We expect a further improvement in this matrix and product rationalisation to further strengthen margins. The company’s portfolio is finely balanced between India, Brazil, Germany and the US with Indian being the leader. With consistent FCF generation and moderation in core capex, we expect the leverage situation to improve substantially. However, the recent run up in the stock price has left limited scope for further upside. We maintain our target price of Rs 2475 (28x of FY22E EPS of Rs 88.3).
We downgrade our revenue estimates for FY20E/FY21E. by 3.7% / 7.5% due to downgrade in EU and ROW markets. We increase our EBITDA margins by 115 bps / 129 bps for FY20E / FY21E to 27% / 28.1% on account of better gross margins, lower personnel cost and R & D cost.We upgrade our EPS by 11.4% / 4.9% to Rs. 54.8 / Rs. 69.5 for FY20E / FY21E on account of higher EBITDAM. We roll over to FY22E and revise our price target to Rs. 2437 based on 15x FY22E EV/EBITDA and upgrade our rating to BUY.
Maintain Hold with unchanged PT of Rs. 1,720: Torrent is trading at 18x its FY2021E earnings. We expect the company to report sales and adjusted profit CAGR of 17% and 43%, respectively, over FY2019-FY2021E. We feel, in the near term, USFDA woes will continue to remain an overhang on the stock price. We have maintained our estimates for FY2020E and FY2021E currently. Due to uncertainty related to USFDA outcome, we maintain our Hold recommendation on the stock with an unchanged price target (PT) of Rs. 1,720.
The overhang pertaining to two US focused plants notwithstanding, Torrent continues to impress thanks to its robust margin profile, which can be attributed to global portfolio that comprises ~60% branded generics. We expect a further improvement in this matrix and product rationalisation to further strengthen margins. The company’s portfolio is finely balancedbetween India, Brazil, Germany and the US with Indian being the leader. With consistent FCF generation and moderation in core capex, we expect the leverage situation to improve substantially. We arrive at a target price of Rs 2020 (22x of FY21E EPS of Rs 91.8).
We expect new product approvals will be impacted in future until the plant gets regulatory clearance. We have not factored in any new launches in our valuation model. We change our recommendation on the stock to HOLD from BUY with unrevised Target Price of Rs1,740, valuing it at 14x of FY21E EV/EBITDA.
Strong domestic franchise and new launches coupled with improving productivity would lead to earnings growth over FY19-21E. We remain constructive on domestic formulation business and expect growth of ~12-13% over FY19- 21E, driven by strong growth in chronic segment. The stock is trading at a PE of 30x/22x on FY20/21E earnings. We value TRP at 24x (23x earlier) on FY21 earnings of Rs75.6, which leads to revised target price of Rs 1,815, an upside of ~12%. Maintain BUY. We have factored in muted US revenue growth, given regulatory challenges and price erosion in our estimate of FY20/21E. Key risk to our call would be further escalation in regulatory issues (related to Indrad and Dahej facility) and slowdown in domestic formulation business owing to drug price control and FDC’s crackdown.
Looking ahead, the Management sees strong growth across geographies except the US. Despite US FDA pending issues at Dahej and Indrad plants, it expects US business to remain stable in FY20E even in the worst-case scenario. On gross margin front, it sees ~72% is sustainable, going ahead which will lead to expansion in EBITDA margin. At CMP, the stock trades at attractive valuation of 13.8x and 12.2x of FY20E and FY21E EV/EBITDA. Upwardly revising our EBITDA estimates by 7%/6% for FY20E/FY21E owing to strong outlook, we upgrade our recommendation on the stock to BUY from HOLD with a revised Target Price of Rs1,740 (from Rs 1,625 earlier).
Despite the one-off impact in domestic formulations and Germany, the margins are continuously improving. The benefits of Unichem synergy are bearing fruit as has been reflected by the improvement in MR productivity (Rs 7.2 lakh/month). Going ahead, we expect a further improvement in this matrix and product rationalisation to boost margins. The company’sportfolio is finely balanced between India, Brazil, Germany and the US with India being the leader. With consistent FCF generation and moderation in core capex, we expect the leverage situation to improve substantially. We arrive at our target price of Rs 1750 (24x of FY21E EPS of | 72.9).
Outlook & Valuation: We broadly maintain our revenues for FY20E/FY21E despite downgrade in US and Brazil business. We upgrade our EBDITAM for FY20E by 32 bps due to better gross margins while we downgrade our EBDITAM by 34 bps to 26.5 % due to higher growth in personnel cost. We downgrade our EPS estimates by 3.3%/7.6 to Rs 49.2/66.3 for FY20E/FY21E. On account of earnings revision and regulatory issues in the US market we downgrade our price target to Rs 1664 based on 12.5x EV/EBDITA FY21E and maintain our HOLD rating on the stock.
Maintain Hold with unchanged PT of Rs. 1,720: The stock is currently trading at 15.4x its FY2021E earnings. We expect thecompany to report sales and adjusted profit CAGR of 17% and 43%,respectively, over FY2019-FY2021E. We feel in the near term, USFDA woes will continue to remain an overhang on the stock price. We have maintained our estimates for FY2020E and FY2021E currently. Due to uncertainty related to USFDA outcome, we continue to maintain our Hold recommendation on the stock with an unchanged PT of Rs. 1,720.
Maintain Hold with unchanged PT of Rs. 1,720: The stock is currently trading at 16.2x its FY2021E earnings. We expect the companyto report sales and adjusted profit CAGR of 17% and 43%, respectively, over FY2019-FY2021E. We feel in the near term, USFDA woes will continue to remain an overhang on the stock price. We have maintained ourestimates for FY2020E and FY2021E currently. We also maintain our Hold recommendation on the stock with unchanged PT of Rs. 1,720. Post thequarterly results call, we shall revisit our estimates and recommendation.
We believe sustained improvement in the productivity will drive the overall margins over FY19-21E. The stock is trading at PE of 27x/20x for FY20/21E earnings. We have Buy rating on the stock, given its robust earnings growth (~24% CAGR over FY19-21E) on the back of strong presence in chronic and sub-chronic therapeutic area and improvement in the productivity of field force. We value TRP at 23x on our FY21 earnings of Rs76.9, which leads to target price of Rs 1,770, with upside of ~16%. Key risk to our call would be escalation in regulatory issues (related to Indrad and Dahej facility) and slowdown in domesticformulation business owing to drug price control and FDC’s crackdown.
Currently, TRP’s two major facilities (major filings done) are under USFDA radar. Recently, Indrad and Dahej facility received 4 and 5 observations, respectively which were serious in nature (related to OOS; out of specifications). We see this will be a key overhang on the stock. In addition, TRP has done large scale recall of its key product (Losartan and Losartan HCTZ) from the US market. At CMP, the stock trades at 15.9x and 14.0x of FY20E and FY21E EV/EBITDA. Owing to 1) lower than expected growth in domestic and US business over the next two years and 2) pending USFDA issues, we cutting down our EBITDA estimates by 14%/17% for FY20E/FY21E, we maintain HOLD recommendation on the stock with a revised Target Price of Rs1,625 (from Rs 1,860 earlier).
We downgrade TRP to NEUTRAL following a 13% earnings cut owing to several headwinds in the US biz, which will persist over the next 4-6 quarters, in our view. Our revised TP is Rs 1,745/sh (24x FY21E EPS).We believe the growth in India and other businesses will enable TRP to shed ~Rs 16bn net debt over the next two years, aiding ~35% EPS CAGR. Any overreaction on the stock in the near term should be taken as an opportunity to enter.
Product rationalisation in India, discontinuance of Losartan in the US and impairment pertaining to shutdown of US plant impacted Q4. The benefits of Unichem synergy are bearing fruits as reflected in the improvement in MR productivity. Going ahead, we expect a further improvement in this matrix and product rationalisation to boost margins. The company’s portfolio isfinely balanced between India, Brazil, Germany and the US with Indian being the leader. With consistent FCF generation and moderation in core capex, we expect leverage situation to improve substantially. We arrive at our target price of Rs 1940 (25x of FY21E EPS of Rs 77.6).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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