BackTorrent Pharma share price jumps over 8% to touch 52-week high post robust Q4 results; is it the right time to invest?
Torrent Pharma's share price hit a 52-week high after Q4 results met expectations, with a 56.45% rise in consolidated net profit. The board recommended a final dividend of ₹6 per equity share and plans to raise funds through equity shares issuance.
PremiumTorrent Pharma share price surged over 8% to touch a 52-week high on Monday after the company's Q4 results were mostly in line with the Street's estimates. On the strength of higher revenue, Torrent Pharmaceuticals reported a 56.45% rise in its consolidated net profit to ₹449 crore for the March quarter on Friday. The company's consolidated revenue from operations for the fourth quarter of FY24 was ₹2,745 crore, up from ₹2,491 crore for the same time the previous year.
According to the company, revenue in India increased by 10% to ₹1,380 crore during the quarter, while revenue in Brazil grew by 17% to ₹372 crore and in Germany by 11% to ₹280 crore.
However, it also stated that US business revenue was down 6% to ₹262 crore.
Subject to shareholder approval, Torrent Pharma stated that its board has recommended a final dividend of ₹6 per equity share, or ₹5 apiece.
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The board has also suggested that in order to fund up to ₹5,000 crore through the issuing of equity shares—including convertible bonds and debentures through qualified institutional placement (QIP) and/or other methods—enabling consent be obtained from the shareholders.
Torrent Pharma share price opened at an intraday-high of ₹2,839.90 apiece on BSE. According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, the stock prices have seen a strong gap-up opening above the previous session high; in the morning session itself, the prices are up 4%. We are seeing strong volumes in this move and expect the uptrend to continue. Recently, 2,750 has been acting as a hurdle, and a break beyond this would trigger a trending move, possibly towards 2,900, and 2,650 is seen as support.
Further, Ruchit Jain, Lead Research Analyst at 5paisa, added that the stock has consolidated in a range in the last three months. However, the prices have not breached the 100 DEMA support, and hence, it just seems to be a time-wise correction within a broader uptrend. A closing above 2,750 could lead to a resumption of the uptrend. The immediate supports are around ₹2,600 and ₹2,530.
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Is it the right time to invest?
Nuvama Institutional Equities
Notwithstanding significant downturn in RoW and US business, Torrent Pharma reported largely in-line Q4FY24 figures, according to the brokerage. With 73% of sales coming from branded generics, the eight-year greatest EBITDA margin was 32.2%.
The management anticipates a strong overall performance in FY25E, maintaining double-digit growth in the branded generics markets in Brazil and India. Germany is predicted to expand by 8% YoY in the upcoming year as a result of new launches and tenders. The US is expected to rise as a result of recent launches and the restoration of compliance at its Dahej facility.
“We build in FY25E/26E EBITDA margin of 32%/33.2% and PAT growth of 32% over FY24–FY26E. Retain’ BUY’, valuing the stock at 37x FY26E EPS with target price of ₹3,000 (earlier ₹2,910)," the brokerage said.
Antique Stock Broking
As to the brokerage, the business recorded sales increase of about 10% on a year-over-year basis, in line with its projection. With price increases, top brand growth, new product launches, and the consumer health portfolio, its branded India formulations business increased by around 10%.
Brazil formulations had strong growth in the export market, rising 11% in CC terms on a year-over-year basis due to new product releases and increased volume in premium brands. Due to fresh concession wins and improved tender conversion rates, the German business continued to grow at an 11% YoY pace throughout the quarter.
“With a strong growth outlook for the India and Brazil businesses coupled with growing German and US formulations, we expect TRP’s revenue to grow at a CAGR of ~13% over a two-year period. We also increase our EBITDA margin assumption to ~35% and EPS estimate by ~10% for FY26. We maintain BUY rating on the stock and increase our TP to ₹3,244 (earlier ₹2,955), valuing the company at a P/E multiple of 40x on FY26 EPS," said the brokerage.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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