Shares of Torrent Pharmaceuticals began Wednesday's trading session positively after the firm delivered a strong performance for the March-ending quarter.
The scrip opened 2% higher at ₹1,749 apiece compared to the previous closing price of ₹1,713.55 and surged further during the early trade to mark a new 52-week high of ₹1850, up by 8%.
The drug maker on Tuesday reported a consolidated net profit to ₹287 crore as compared to the net loss of ₹118 crore in Q4FY22. It posted a 17% surge in revenues to ₹2,491 crore in Q4 from ₹2,131 crore in the similar quarter of the previous fiscal.
In Q4, the company's revenue from India, which accounted for over 50% of its total revenues, increased from ₹1,034 crore in Q4 FY22 to ₹1,257 crore. Additionally, sales from Germany, Latin America, and the rest of the world (RoW) also experienced significant growth.
Latin America, sales grew by 27% YoY to ₹318 crore, representing 13% of total sales. Germany's sales increased by 16% YoY to ₹253 crore, accounting for 10% of sales.
RoW sales saw a 27% YoY growth to ₹277 crore, contributing to 11% of sales. However, US generics sales declined slightly by 1% YoY to ₹280 crore, representing 11% of sales.
Its gross margin expanded 130 basis points (bps) YoY to 72.1% due to a better product mix, according to analysts.
Furthermore, the EBITDA margin witnessed an even higher growth rate of 350 basis points year-on-year, driven by improved gross margins and reduced other expenses as a percentage of sales, although this was partially offset by an increase in employee expenses as a percentage of sales.
Additionally, the company's board of directors announced an interim dividend of ₹8 per share of ₹5 each during their meeting held on Tuesday.
According to domestic brokerage firm Motilal Oswal, the company remains committed to its branded generics business in key markets such as India and Brazil. Additionally, the company aims to strengthen its consumer healthcare segment in India, which is expected to contribute to the growth of established brands.
Resolving compliance issues is crucial for expanding its US generics business, and the company has taken steps to outsource certain products to support this growth. However, the brokerage noted that the current valuation already reflects the potential increase in earnings.
The brokerage maintained a 'Neutral' rating on the stock with a target price of ₹1,650 apiece. According to Trendlyne, the average analyst target price stands at ₹1,743 apiece.
31 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
