Dolat Capital: Torrent Pharma Reports Best-Ever Quarter Led By Huge Cost Savings

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Torrent Pharmaceuticals Ltd. reported its best ever quarter operationally led by huge cost savings as lockdown in India led to slowdown of marketing and promotional activities.With 85% of medical representatives back on the field we expect this to normalize in next two quarters.While Sales growth was in-line, gross margin at 73.4% (240 basis points YoY) was a function of growth in branded markets. Further aided by lower fixed costs, Ebitda margin came in at 32% (our estimate 26%).Though management refrained from giving guidance, the commentary was upbeat on outperforming market growth in India.Two of its key businesses, Germany and U.S., impacted due to standard operating procedures and compliance issues are expected to be resolved by H2 FY21/FY22E.Nonetheless, we believe the focus should remain primarily on the domestic market, which is likely to account for 65% of its FY22E Ebitda, with U.S. contribution expected to come down to 8% of FY22 Ebitda.While Torrent has delivered impressive growth in India led by synergistic acquisitions, we believe growth levers from India business has been captured largely and margins have peaked for Torrent Pharma as current valuation leaves limited room for an upside.Focus will now shift to growth and balance sheet de-leveraging (guided for debt reduction of Rs 10 billion in FY21)..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Dolat Capital: Torrent Pharma Reports Best-Ever Quarter Led By Huge Cost Savings

Dolat Capital: Torrent Pharma Reports Best-Ever Quarter Led By Huge Cost Savings

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