Shares of Torrent Pharmaceuticals rose 3 percent to rupees 3,106 on the BSE in intraday trading on Wednesday, in an otherwise weak market, after the company reported healthy margins of 34 percent for the quarter ending in June. of 2021 (Q1FY22).
The drugmaker's shares recovered 7.5 percent from an intra-low of Rs 2,890. It had hit a 52-week high of Rs 3,121.45 on Tuesday, July 26. By comparison, the S&P BSE Sensex was down 0.87 percent or 456 points to 52,123 as of 11:28 a.m.
Torrent Pharma Q1FY22 revenue grew 3.8 percent YoY to Rs 2,134 crore on the back of 18% YoY growth in domestic formulations to Rs 1,093 crore. However, US revenue declined 29 percent year-on-year to Rs 266 crore amid continued price erosion at the base business and a lack of new approvals pending a new facility inspection.
According to data from All Indian Origin Chemists and Distributors (AIOCD), Torrent's Q1FY22 growth was 24% versus the Indian Pharmaceutical Market (IPM) growth of 37%. IPM growth during the quarter includes a high contribution from Covid treatments and a low base last year.
The company's Ebitda (earnings before interest, taxes, depreciation and amortization) margins remained healthy at 34 percent in the first quarter of fiscal 22, improving by 200 basis points (bps) from 32 percent in the first quarter of fiscal year 21. Profit after tax (PAT) for the quarter under review grew 2.8 percent year-on-year to Rs 330 million.
Torrent Pharma said it launched baricitinib during the quarter and is currently conducting clinical trials for molnupiravir; more partnerships under evaluation to expand the covid portfolio.
Torrent Pharma It is ranked 8 in the IPM and is among the top 5 in the therapeutic segments of Cardiovascular (CV), Central Nervous System (CNS) and Nutritional Mineral Vitamins (VMN).
HDFC Securities analysts believe the US business ($ 36 million) has largely bottomed out and is likely to improve from current levels. In India, Torrent's decision to enter the Trade Gx business will allow it to improve coverage in acute / subchronic therapies. While this may dilute the margin, it will allow the company to expand its growth horizons. "The overview for all markets (ex-US) remains healthy as we expect Torrent to outpace industry growth, "the brokerage firm said in the results update.
According to ICICI Securities, the company continues to impress thanks to careful capital allocation and a strong margin profile, which can be attributed to a global portfolio comprising around 60 percent brand name generics. "The company's portfolio is finely balanced between India, Brazil, Germany and the United States, with India being the leader. With a constant FEL generation and a moderation in core capex, we expect the leverage situation to improve substantially." the brokerage firm said in a note.
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