The share price of Torrent Pharma increased by more than 8% on Monday, reaching a 52-week high, following the release of the company's Q4 earnings, which mainly met Street expectations. Torrent Pharmaceuticals announced on Friday a 56.45% increase in its consolidated net profit to ₹449 crore for the March quarter, driven by greater sales. Consolidated revenue from operations for the firm increased to ₹2,745 crore in the fourth quarter of FY24 from ₹2,491 crore in the same period the previous year. The business reports that during the quarter, sales in Brazil jumped by 17% to ₹372 crore, while in Germany, revenue increased by 11% to ₹280 crore. In India, revenue increased by 10% to ₹1,380 crore.
It did note, however, that US business revenue had decreased by 6% to ₹262 crore.
Torrent Pharma said that its board has proposed a final dividend of ₹6 per equity share, or ₹5 each, subject to shareholder approval.
The board has also recommended that enabling approval be acquired from the shareholders in order to fund up to ₹5,000 crore by the offering of equity shares—including convertible bonds and debentures through qualified institutional placement (QIP) and/or other ways.
On the BSE, the share price of Torrent Pharma began the day at a high of ₹2,839.90 per. The stock prices had a significant gap-up start above the prior session high, according to Rajesh Bhosale, Equity Technical and Derivative Analyst, Angel One; during the morning session alone, the prices were up 4%. Strong volumes are being seen in this move, and we anticipate that the upswing will continue. 2,750 has been operating as a barrier recently; a breach of this level would initiate a trending move, potentially towards 2,900, with 2,650 serving as support.
Additionally, for the past three months, the stock has stabilized in a range, according to Ruchit Jain, Lead Research Analyst at 5paisa. But because the prices haven't broken above the 100 DEMA support, all that appears to be happening is a temporal correction inside a larger rally. An uptrend restart might result upon a close above 2,750. The ₹2,600 and ₹2,530 areas serve as the immediate supports.
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Torrent Pharma reported essentially in-line Q4FY24 statistics, despite a notable decline in RoW and US revenue, according to the brokerage. With branded generics accounting for 73% of sales, the highest eight-year EBITDA margin was 32.2%.
The management is expecting double-digit growth in the branded generics markets in Brazil and India, along with a solid overall performance in FY25E. The future year is expected to see Germany increase by 8% YoY due to new tenders and launches. Due to recent launches and the restoration of compliance at its Dahej factory, the US is anticipated to climb.
"We factor in a 32% increase in PAT over FY24–FY26E and an EBITDA margin of 32%/33.2% for FY25E/26E. Retain' BUY, valuing the stock at 37x FY26E EPS with a target price of ₹3,000 (earlier ₹2,910),” the firm stated.
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Regarding the brokerage, the company's sales increased by almost 10% year over year, as anticipated. About 10% more business was generated by price hikes, top brand growth, new product launches, and the consumer health portfolio for its branded India formulations.
Brazil's formulations saw robust growth in the export market, with an 11% gain in CC terms year over year because of the introduction of new products and higher volume of premium brands. The German business grew at an 11% YoY pace during the quarter thanks to new concession wins and higher tender conversion rates.
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