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Torrent Pharmaceuticals Ltd.'s Q2FY24 results were largely in line with our estimate as well as consensus estimates, led by strong growth in major branded generic markets along with margin improvement aided by better product mix and cost optimization initiatives.
The strong performance was driven by strong growth in India helped by the acquisition of Curatio and new launches, while the Brazilian business continued to outperform the market.
German business growth was led by the revival of the tendering business. However, the generics business in the United States reported a decline due to pricing pressure and a lack of new launches.
We are positive about Torrent Pharma primarily due to its strong portfolio of chronic disease-focused brands and industry-leading primary care population medicine. in India and healthy margins and free cash flow, which continue to provide the opportunity for further inorganic growth.
We maintain 'Buy' with a target price of Rs 2,197, valuing it at 19 times enterprise value/Ebitda as of September 25.
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