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Prabhudas Lilladher Report
Torrent Pharmaceuticals Ltd.’s Q1 FY24 Ebitda was largely inline, however profit after tax was above our estimate led by lower tax and higher other income.
Our FY24 and FY25E earnings per share stands increased by ~5% as we factor in higher gross margins and lower tax. Torrent Pharma has Rs 70 billion (75% of total sales) worth of highly profitable branded formulation sales spread across India, Brazil and rest of world markets.
Curatio acquisition has been scaling up well with 700 basis points margin improvement since acquisition. Historically Torrent Pharma has successfully managed to integrate Unichem and Elder acquisition which gives us comfort.
We expect 18% Ebitda compound annual growth rate and 31% profit after tax CAGR over FY23-25E.
Maintain ‘Buy’ rating with revised target price of Rs 2,250/share, 20 times enterprise value/Ebitda to FY25E.
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