A word about the company: Torrent Pharmaceuticals Ltd. is the flagship company of the Torrent Group. Based in the Indian city of Ahmedabad. It was promoted by U. N. Mehta, initially as Trinity Laboratories Ltd, and was later renamed Torrent Pharmaceuticals Ltd.
CMP: 2,581
Total revenue from operations 1,946 Cr
1,856 Cr (4.84%) YoY | 1,966 Cr (-1.05%) QoQ
Year ending revenue: 7,939 Cr Vs. 7,673 Cr (3.41%)
Net Profit of 314 Cr
(152) Cr (306.58%) YoY 251 Cr (25.09%) QoQ
Year ending Net profit: 1,025 Cr Vs. 436 Cr (135.21%)
EPS (in Rs.) 18.56
(8.95) YoY | 14.77 QoQ
Year ending EPS: 60.55 Vs. 25.78
View: Result is above expectation and overall good. YoY revenue increased and PBT also increased.
Business Updates & Highlights:
Q4FY20 EBITDA is INR 562 Vs. 486 Cr in Q4FY19 therefore up by 16% in YoY. FY20 EBITDA is around INR 2,284 Cr Vs. 2,025 Cr in FY19 therefore up by 13%. EBITDA margin in FY20 is 29% Vs. 26% in FY19 therefore up by 300 bps
India revenues at Rs 840 crores grew by 11%. Adjusted for Covid-19 related supply delays, the growth is 15%.For FY20, revenues were Rs 3,517 crores, up by 9%. Adjusted for base impact of discontinued products and Covid 19 related supply delays, the adjusted growth was 12%.
US revenues at Rs 385 crores were up by 3%. Constant currency sales were $52 million driven by market share gain in existing molecules. For FY20, revenues were Rs 1,523 crores, down by 4% (Constant currency sales: $207 million, down by 2%).
As on March 31, 2020, 48 ANDAs were pending approval and 6 tentative approvals were received
Brazil revenues at Rs 196 crores were down by 5%.For FY20, revenues were Rs 715 crores, up by 4% (Constant currency sales: R$409 million, up by 12%).
Germany revenues were at Rs 216 crores, down by 10%.For FY20, revenues were Rs 947 crores, down by 6% (Constant currency sales: Euro 119 million, down 4%)
In Q4, the Company had announced an Interim dividend for FY 2019-20 of Rs 32 per equity share (including Rs 15 per equity share as a special dividend), which was paid in March 2020. In view of the same, the Board has not considered any further dividends for FY 2019- 20
Financial
ROE and ROCE is around INR 17% and 12% respectively and book value per share is around INR 320 and share is currently trading at 8.1x of its book value. The company is currently trading at annualized PE of around 43 which is high as per industry benchmark. Promoter holding is around 71.3% in the company which is good and stable. FIIs and mutual funds hold around 9.6% and 8.8% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 1,392 Cr Vs. 1,798 Cr as of March 2019.
Position: Share strong support price is INR 2,480. Long term investors should continue with the company.
Share View: Share price high 2,679 (52 weeks) and now 2,581. Torrent Pharma is 4th largest pharma company in India in terms of Enterprise Value. It is ranked 8th in the Indian Pharma Market and is amongst the Top 5 in the therapeutics segments of Cardiovascular (CV), Central Nervous System (CNS), Gastrointestinal (GI), and Vitamins Minerals Nutritionals (VMN). It is a specialty-focused company with 73% of its revenue in India from chronic & subchronic therapies. It has a presence in 40 countries and is ranked No. 1 amongst the Indian pharma Companies in Brazil, Germany, and the Philippines. Torrent has 8 manufacturing facilities (7 in India & 1 in the US), of which 5 are USFDA approved?
Opportunities: Strong EBITDA growth in QoQ. The chronic segment (a disease that persists over a long period of time such as diabetes, high blood pressure, Alzheimer's, etc.), which accounts for 32% of total Indian pharma the market staged a stellar performance during the past 5-6 years. Changes in lifestyle and food habits coupled with higher disposable income fueled growth in chronic as well as Subchronic diseases / Therapies in recent years. Q4 margins continued to benefit largely from the synergies of the acquired Unichem portfolio, incremental productivity, and cost control.
Risk: Pricing risk since its trading all-time high level. Domestic pharma companies major risk is seen at FDA regulations and observation as per EIR facility.
Get Best Indian Share Market Tips free in your email by filling in your email address in the subscription box and if you can make a small payment, then you can consider going in for best intraday tips and seasoned traders can go for bank nifty option tips to make quick money from the market.
You
should Trade Less But Trade Accurately & this is Achieved with our Tip.
