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Torrent Pharmaceuticals Ltd.'s performance in the first quarter of fiscal 22 was largely in line with our estimates.
Revenue grew 3.8% yoy to 21.3 billion rupees with international markets falling 9.8% offset by 18.2% growth in the domestic market.
US sales decreased 2.7% qoq to $ 36 million from an estimated $ 38 million.
A better mix of controlled SG&A income and expenses led to an Ebitda margin improvement of 170 basis points on a quarterly basis.
Adjusted profit after tax grew only 2.8% to Rs 3.3 billion due to the increase in the effective tax rate due to the use of deferred taxes.
We are positive about Torrent Pharma's long-term outlook considering improved growth in the segment's chronically dominating India business, potential official action resolution indicated / warning letter status at two facilities in FY22E, CAGR earnings per share of 13.3% during FY21-FY23E and balance strengthening with the improvement of free cash flow generation.
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