Anand Rathi maintains ‘hold’ rating on Torrent Pharma

MUMBAI: Anand Rathi has maintained a ‘hold’ rating on shares of Torrent Pharma owing to fair valuations. The brokerage has a target price of Rs 1,547 on the stock.

According to Anand Rathi, the stock is trading at 18 times on estimated FY18 earnings and at 16.8 times based on estimated FY19 earnings.

The brokerage expects the pharmaceutical company’s strong earnings trajectory to slow down in FY17 due to the high base of FY16. US business is also likely to slow down.

“We believe that, ahead, growth in the US would slowdown owing to sharp price erosion and keener competition in gAbilify. However, launches such as gAzor, gTribenzor, gSarafem would be short-term growth drivers,” said the brokerage in a note.

On Friday, shares of Torrent Pharmaceuticals ended down 1.2% at Rs 1,282.60 on the BSE.

In the second quarter, the firm reported 59.3% fall in consolidated net profit to Rs 207 crore while consolidated total income from operations also declined to Rs 1,429 crore as against Rs 1,693 crore a year ago.