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Faster exports to drive growth for Torrent
Established in 1994, Torrent Pharmaceuticals Ltd is a flagship company of Torrent group. While its 36 brands
lead in their respective molecule segments, six brands of the company appear in India’s top 300 pharma brands.
Torrent has successfully maintained its dominant position in domestic Cardiovascular (CVS) and Central Nervous
System (CNS) segment with new product launches. In line with industry trend, Torrent has maintained its tilt
towards chronic profile over acute.
By entering into regulated as well as emerging markets, Torrent has successfully increased its footprint in
International markets, which contribute ~51% to the total revenue of the company in FY11. With 27 successful
drug launches, Brazil contributes majorly (32%) to company’s international division. Torrent has been the largest
Faster exports to drive growth for Torrent
supplier of Citalopram and second largest supplier of Zolpidem for the US market.
In 9MFY12, Torrent recorded sluggish performance mainly in the acute therapy segment, due to increasing
competitive pressure. To get back the company on growth path, management has taken corrective action in
terms of addition and improvement in efficiency of field force.
Apart from regular 25-30 drug launches in domestic market every year, the company is planning to enter into
new therapy segments like oncology and infertility to widen its offerings. Similarly in its existing international
market, new launches in Brazil and U.S are expected to propel growth.
Therefore, we initiate coverage on Torrent Pharmaceuticals Ltd. with a BUY rating and a target price of
`660 per share.
Valuation and Recommendation
New launches and increase in field force
efficiency remain key to success for Torrent. We
remain optimistic towards the company’s growth
in the international market.
At CMP, the stock is trading at 13.9 times and
12.9 times FY12 and FY13 earnings respectively.
Therefore, we initiate coverage on TORRENT
PHARMACEUTICALS LIMITED, with BUY rating
and a target price of `660 per share
Key Risks
Stiff competition by MNCs in acute as well as chronic segments is a key risk for Torrent’s business.
Currently, 75 drugs are controlled as per Drug Price Control Order. Any further addition of drugs under
price control may lead to margin erosion for the company.
Company is exposed to currency fluctuation risk as majority of its revenue comes from outside India.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Faster exports to drive growth for Torrent
Established in 1994, Torrent Pharmaceuticals Ltd is a flagship company of Torrent group. While its 36 brands
lead in their respective molecule segments, six brands of the company appear in India’s top 300 pharma brands.
Torrent has successfully maintained its dominant position in domestic Cardiovascular (CVS) and Central Nervous
System (CNS) segment with new product launches. In line with industry trend, Torrent has maintained its tilt
towards chronic profile over acute.
By entering into regulated as well as emerging markets, Torrent has successfully increased its footprint in
International markets, which contribute ~51% to the total revenue of the company in FY11. With 27 successful
drug launches, Brazil contributes majorly (32%) to company’s international division. Torrent has been the largest
Faster exports to drive growth for Torrent
supplier of Citalopram and second largest supplier of Zolpidem for the US market.
In 9MFY12, Torrent recorded sluggish performance mainly in the acute therapy segment, due to increasing
competitive pressure. To get back the company on growth path, management has taken corrective action in
terms of addition and improvement in efficiency of field force.
Apart from regular 25-30 drug launches in domestic market every year, the company is planning to enter into
new therapy segments like oncology and infertility to widen its offerings. Similarly in its existing international
market, new launches in Brazil and U.S are expected to propel growth.
Therefore, we initiate coverage on Torrent Pharmaceuticals Ltd. with a BUY rating and a target price of
`660 per share.
Valuation and Recommendation
New launches and increase in field force
efficiency remain key to success for Torrent. We
remain optimistic towards the company’s growth
in the international market.
At CMP, the stock is trading at 13.9 times and
12.9 times FY12 and FY13 earnings respectively.
Therefore, we initiate coverage on TORRENT
PHARMACEUTICALS LIMITED, with BUY rating
and a target price of `660 per share
Key Risks
Stiff competition by MNCs in acute as well as chronic segments is a key risk for Torrent’s business.
Currently, 75 drugs are controlled as per Drug Price Control Order. Any further addition of drugs under
price control may lead to margin erosion for the company.
Company is exposed to currency fluctuation risk as majority of its revenue comes from outside India.
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