Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Torrent Pharma (TRP IN)
OW(V): Exports shine, India stays muted
Strong exports on the back of INR depreciation; overall sales
growth of c21.8% yoy although domestic growth remains
muted
Margins in line ex-forex loss, but partly helped by favourable
currency
Brazil momentum to sustain, material US opportunities in
FY13. We maintain our OW(V) rating and INR680 TP
Torrent Pharma reported 3QFY12 net profit of INR832m (largely in line with our
estimate) up c8% yoy partly impacted by a forex loss of INR180m (essentially MTM on
hedges). Net sales at INR6.7bn were up c22% yoy, ahead of our estimated INR6.4bn,
driven by strong growth in Brazil and the US and by a weaker INR. EBITDA margins
exceeded our estimate, despite lower sales growth in India, due to currency benefit.
Exports offset slower India: Overall exports grew 19% yoy on constant currency (cc)
terms: Brazil was up c27% (21% yoy on cc terms) and the US up 67% yoy (51% yoy on
cc). Brazil outlook guided at 15%+ yoy growth. The company expects to launch 3-4
products in Brazil in the next six months. The US was strong on the back of recent
launches in donepezil, venlafaxine, levofloxacin and olanzapine ODT. We expect more
interesting launches in the US in FY13. Three ANDAs were filed during 3QFY12 -
cumulative pending ANDA approvals stand at 31. Germany grew 14% yoy. Contract
manufacturing grew 4% yoy and was lower than our estimate, but improved significantly
qoq. India formulations remain weak (c8% yoy) due to continuing pressure in acute
therapies. The company expects the number of divisions to increase to c11-12 (from 10
currently) with a sales force of c3,600 after the addition of one new division.
Weak INR to improve operating performance: Torrent has hedged at c51 INR/USD for
next few quarters which we believe should benefit Q4FY12 as well. We expect the Indian
business recovery to remain slow, although we look for c15% growth in FY13 and FY14.
Maintain OW(V) rating with a TP of INR680: We expect sales and net profit CAGR of
c16-17% over the next two years, with a c100bp improvement in EBITDA margin over
the same period. Additionally, we expect tax benefits from Sikkim to be posted in FY13-
FY14. We continue to value the stock at 13x Sep-13 EPS of INR51.8 rounded up to
INR680. The stock is currently trading at 11.4x FY13e EPS, lower than its historical
three-year average valuations. Key risks in our view remain sluggish growth of domestic
formulation business and slowdown in Brazil growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Torrent Pharma (TRP IN)
OW(V): Exports shine, India stays muted
Strong exports on the back of INR depreciation; overall sales
growth of c21.8% yoy although domestic growth remains
muted
Margins in line ex-forex loss, but partly helped by favourable
currency
Brazil momentum to sustain, material US opportunities in
FY13. We maintain our OW(V) rating and INR680 TP
Torrent Pharma reported 3QFY12 net profit of INR832m (largely in line with our
estimate) up c8% yoy partly impacted by a forex loss of INR180m (essentially MTM on
hedges). Net sales at INR6.7bn were up c22% yoy, ahead of our estimated INR6.4bn,
driven by strong growth in Brazil and the US and by a weaker INR. EBITDA margins
exceeded our estimate, despite lower sales growth in India, due to currency benefit.
Exports offset slower India: Overall exports grew 19% yoy on constant currency (cc)
terms: Brazil was up c27% (21% yoy on cc terms) and the US up 67% yoy (51% yoy on
cc). Brazil outlook guided at 15%+ yoy growth. The company expects to launch 3-4
products in Brazil in the next six months. The US was strong on the back of recent
launches in donepezil, venlafaxine, levofloxacin and olanzapine ODT. We expect more
interesting launches in the US in FY13. Three ANDAs were filed during 3QFY12 -
cumulative pending ANDA approvals stand at 31. Germany grew 14% yoy. Contract
manufacturing grew 4% yoy and was lower than our estimate, but improved significantly
qoq. India formulations remain weak (c8% yoy) due to continuing pressure in acute
therapies. The company expects the number of divisions to increase to c11-12 (from 10
currently) with a sales force of c3,600 after the addition of one new division.
Weak INR to improve operating performance: Torrent has hedged at c51 INR/USD for
next few quarters which we believe should benefit Q4FY12 as well. We expect the Indian
business recovery to remain slow, although we look for c15% growth in FY13 and FY14.
Maintain OW(V) rating with a TP of INR680: We expect sales and net profit CAGR of
c16-17% over the next two years, with a c100bp improvement in EBITDA margin over
the same period. Additionally, we expect tax benefits from Sikkim to be posted in FY13-
FY14. We continue to value the stock at 13x Sep-13 EPS of INR51.8 rounded up to
INR680. The stock is currently trading at 11.4x FY13e EPS, lower than its historical
three-year average valuations. Key risks in our view remain sluggish growth of domestic
formulation business and slowdown in Brazil growth.
No comments:
Post a Comment