Torrent Pharma Fairly Valued – Maintain Hold ::Emkay

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Torrent Pharma

Fairly Valued – Maintain Hold

HOLD

CMP: Rs641                                        Target Price: Rs663

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n     Q1’12 was above estimate with Revenues at Rs6.5bn (up 20% YoY), EBITDA at Rs1.2bn (up 19%) & PAT at Rs1bn (up 38% YoY)

n     Above estimate sales were led by licensing income (Rs170mn vs. Rs24mn in Q1FY11) and spill over of Brazil sales of Rs200 mn from Q4’11 to Q1’12

n     Revenues were driven by 56% growth in US and 22% growth in Brazil. CMO business grew at 10% YoY

n     With higher licensing income and lower tax rates – revise the earnings upwards with a target price to Rs663 (15x FY13 earnings of Rs44.2). Maintain Hold