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Torrent Pharma Q1 Review - Strong Margins Likely To Sustain: ICICI Securities

Torrent Pharma Q1 Review - Strong Margins Likely To Sustain: ICICI Securities

<div class="paragraphs"><p>A worker wearing protective rubber gloves handles uncoated tablets. (Photographer: Andrey Rudakov/Bloomberg)</p></div>
A worker wearing protective rubber gloves handles uncoated tablets. (Photographer: Andrey Rudakov/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Torrent Pharmaceuticals Ltd.’s Q1 FY22 performance was largely in line with our estimates.

Revenue grew 3.8% y-o-y to Rs 21.3 billion with international markets declining 9.8% offset by 18.2% growth in domestic market.

U.S. sales declined 2.7% q-o-q to $36 million versus estimated $38 million.

Better revenue mix and controlled selling, general and administrative expenses led to Ebitda margin improvement of 170 basis points q-o-q.

Adjusted profit after tax grew just 2.8% to Rs 3.3 billion due to increase in effective tax rate on account of deferred tax utilisation.

We are positive on Torrent Pharma's long-term outlook considering growth improvement in India business with chronic segment dominance, potential resolution of official action indicated/warning letter status at two facilities in FY22E, earning per share CAGR of 13.3% over FY21-FY23E and strengthening balance sheet with improving free cash flow generation.

Click on the attachment to read the full report:

ICICI Securities Torrent Q1FY22 Results Update.pdf

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