Neutral on Torrent Pharma, target price Rs 2520: Motilal Oswal

Motilal Oswal has neutral call on Torrent Pharma with a target price of Rs 2520. The current market price of Torrent Pharmaceuticals Ltd. is Rs 2592.65.

Torrent Pharmaceuticals Ltd., incorporated in the year 1972, is a Large Cap company (having a market cap of Rs 43659.46 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 1972.00 Crore, down -.65 % from last quarter Sales of Rs 1985.00 Crore and up 2.49 % from last year same quarter Sales of Rs 1924.00 Crore Company reported net profit after tax of Rs 297.00 Crore in latest quarter.


Investment Rationale
The brokerage expects a 21% earnings CAGR, led by a 10% CAGR in DF sales, 300bp margin expansion, and reduced interest cost on account of debt reduction. However, it maintains Neutral as the current valuation adequately factors in the improving outlook in DF/Germany/Brazil.

Promoter/FII Holdings
Promoters held 71.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 12 per cent, DIIs 8.1 per cent and public and others 8.7 per cent.