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S t i l l s c o p e f o r i m p r o v e m e n t …
Torrent Pharma’s Q1FY12 results were above expectations. Total
revenues grew 19.7% to | 647.5 crore above our estimate of | 621 crore
as the company received licensing income of | 17 crore from the MNCs.
Excluding the licensing amount, revenues increased 17% in line with our
expectation. The growth in sales was driven by healthy growth in the US,
Brazil and CRAMS. EBITDA margins improved 290 bps YoY to 23.6% due
to licensing income and lower R&D expenses. Net profit increased by
38% to | 102.5 crore. We have maintained our HOLD rating on the stock
as we believe there remains further scope for improvement in the core
business.
ƒ Domestic business witnesses marginal YoY growth
The domestic formulation business witnessed lower growth of 10%
YoY to | 246 crore on the back of lower growth in gastro and pain
therapies. However, CNS and CVS segments witnessed impressive
growth of 17% YoY during the quarter. It launched 18 new products
including line extensions and plans to launch additional 40 products
(including line extensions) in the current fiscal. Marginal growth in
gastro and pain therapies was mainly on the back of increase in
competition.
ƒ Launches two products in US market
Sales from the US business increased by 58% YoY to | 44.3 crore
on account new product launches. It launched two products in the
current quarter taking total product launches so far to 17. Till date, it
has filed 60 ANDAs with the USFDA and received approval for 28.
Around 22 ANDAs are under development.
V a l u a t i o n
The stock is trading at ~15x FY12E EPS of | 43.5 and ~12x FY13E EPS of
| 52.1. We expect revenues, EBITDA and PAT to grow at a CAGR of
20.1%, 31.1% and 27.8%, respectively, between FY11 and FY13E. We
believe the new product launches across the globe and chronic focus will
hold the key for improvement. We have valued the stock at | 678 i.e. 13x
FY13E EPS of | 52.1 with a HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t i l l s c o p e f o r i m p r o v e m e n t …
Torrent Pharma’s Q1FY12 results were above expectations. Total
revenues grew 19.7% to | 647.5 crore above our estimate of | 621 crore
as the company received licensing income of | 17 crore from the MNCs.
Excluding the licensing amount, revenues increased 17% in line with our
expectation. The growth in sales was driven by healthy growth in the US,
Brazil and CRAMS. EBITDA margins improved 290 bps YoY to 23.6% due
to licensing income and lower R&D expenses. Net profit increased by
38% to | 102.5 crore. We have maintained our HOLD rating on the stock
as we believe there remains further scope for improvement in the core
business.
ƒ Domestic business witnesses marginal YoY growth
The domestic formulation business witnessed lower growth of 10%
YoY to | 246 crore on the back of lower growth in gastro and pain
therapies. However, CNS and CVS segments witnessed impressive
growth of 17% YoY during the quarter. It launched 18 new products
including line extensions and plans to launch additional 40 products
(including line extensions) in the current fiscal. Marginal growth in
gastro and pain therapies was mainly on the back of increase in
competition.
ƒ Launches two products in US market
Sales from the US business increased by 58% YoY to | 44.3 crore
on account new product launches. It launched two products in the
current quarter taking total product launches so far to 17. Till date, it
has filed 60 ANDAs with the USFDA and received approval for 28.
Around 22 ANDAs are under development.
V a l u a t i o n
The stock is trading at ~15x FY12E EPS of | 43.5 and ~12x FY13E EPS of
| 52.1. We expect revenues, EBITDA and PAT to grow at a CAGR of
20.1%, 31.1% and 27.8%, respectively, between FY11 and FY13E. We
believe the new product launches across the globe and chronic focus will
hold the key for improvement. We have valued the stock at | 678 i.e. 13x
FY13E EPS of | 52.1 with a HOLD rating.
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