Torrent Pharma Margin pressure to continue; Downgrade estimates :Emkay

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Torrent Pharma

Margin pressure to continue; Downgrade estimates

HOLD

CMP: Rs 619                                        Target Price: Rs 598

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n     Q4’11 was impacted by write-off in the US market and delayed shipment to Brazil. Revenues at Rs5.1bn, (up 8% YoY), EBITDA at Rs536mn (down 45%) & PAT at Rs428mn (down 28% YoY)

n     Adjusted for Rs280mn write-off in the US market, revenues grew by 14% YoY to Rs5.4bn in Q4

n     Revenues were driven by 10% growth in domestic formulations and 11% growth in exports. CMO business grew at a steady rate of 13% YoY

n     Margin pressure to continue – revise the target price to Rs598 (14x FY13 earnings) and downgrade to hold