Torrent Pharma shares rise 6% post March quarter results

Shares of Torrent Pharmaceuticals, on Wednesday, gained 6 per cent at Rs 2,891.55 in intra-day trade on the BSE after the drug firm reported a 3.18 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 324 crore for the quarter ended March 31, 2021, mainly on the back of continued India business recovery momentum, and cost control.

Consolidated revenue from operations of the company stood at Rs 1,937 crore for the quarter under consideration. It was Rs 1,946 crore for the same period a year ago, Torrent Pharma said in an exchange filing, on Tuesday.

For the financial year ended March 2021, net profit of the company was Rs 1,252 crore as against Rs 1,025 crore in 2019-20, it said.

The revenue from operations for the fiscal year ended March 2021 stood at Rs 8,005 crore. It was Rs 7,939 crore in the previous fiscal year. India revenues stood at Rs 922 crore for the quarter under consideration, a growth of 10 per cent, the filing said, it added

The company's board has recommended a final dividend of Rs 15 per equity share of Rs 5 each, Torrent Pharma said.

At 10:10 AM, the stock was was trading 4.86 per cent higher at Rs 2,855.80 on the BSE as compared to a flat S&P BSE Sensex. Around 10.66 lakh shares have changed on the BSE and NSE combined, so far.

HDFC Securities said that Torrent’s Q4 results were largely in line with their estimates as strong trends in India and Germany offset weak US. The brokerage maintained its 'ADD' stance on the stock with revised target price of Rs 2,905.

"While US business bottomed out in Q4, it is likely to witness only modest growth, given key plants of Dahej and Indrad remain impacted by OAI/WL issues with limited visibility on resolution timelines. The outlook for other key markets remains healthy as they continue to outperform the industry growth. Torrent continues to generate high free cash flow (FCF) and has repaid debt of Rs 900 crore in FY21 (guides for similar reduction in FY22). Its strong India franchise (chronic focused portfolio) and superior ROCE profile (19%+ in FY23e vs. 13%+ for peers) justifies premium valuations. We marginally tweak estimates by -1%/0% in FY22/23e," it said.

"Torrent has completed the restructuring of its domestic field force and is now exploring partnerships to strengthen its Covid portfolio. US revenue declined by 30 per cent YoY owing to erosion in the base business and the base impact of product discontinuations in the sartan portfolio with a near-term recovery remaining contingent on the Levittown facility coming on stream (expected by Q1FY22), partnered launches and the re-launch of sartans expected by the end of FY22. While performance in Germany was broadly in line despite the impact of Covid-related disruptions, the recovery in Brazil surprised on the upside and was driven by volume traction in key brands. We cut our FY22/23E EPS by c.4%/3% to account for the continued weakness in the US business and a lower contract manufacturing revenue guidance. Maintain HOLD," JM Financial said in a note.

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