ICICI Securities: Torrent Pharma’s Operating Leverage Story To Continue
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ICICI Securities Report
Torrent Pharmaceuticals Ltd.’s Ebita margin has consistently improved over the years backed by superior business mix, strong execution and operating leverage.
Ebitda margin improved approximately 400 basis points over FY18-FY20 and we expect it to improve further 350 basis points over FY20-FY23E driven by operating leverage and improving revenue mix.
We are positive on the long-term outlook considering growth improvement in India business with dominance of chronic segment, potential resolution of official action indicated status at two facilities in FY21, earning per share compound annual growth rate of 24.2% over FY20-FY23E and strengthening balance sheet with growing free cash flows.
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