Torrent Pharma stock zooms 9% post Q4 earnings

Shares of Torrent Pharma zoomed 9 percent today despite the firm reporting a loss of Rs 118 crore in the March 2022 quarter. Torrent Pharma stock gained 8.92 percent to Rs 2,869.6 against the previous close of Rs 2634.55 on BSE. The stock has gained 9.44 percent in two sessions. The pharma stock trades higher than 5-day, 20-day, 50-day and 100-day moving averages but lower than 200-day moving averages.

The stock opened with a gain of 4.38 percent at Rs 2750 today. The share has gained 5.57 percent in one year but lost 13 percent since the beginning of this year. The market cap of the firm rose to Rs 48,303 crore on BSE.

The company logged a consolidated net loss of Rs 118 crore for the quarter ended March 31, 2022, after provisioning for an exceptional item of Rs 485 crore.  The company reported a consolidated net profit of Rs 324 crore in the corresponding quarter last year.

"Exceptional item of Rs 485 crore relates to impairment provision and costs related to discontinuation of liquid business in the US," the company said.

Consolidated revenues from operations climbed 10 percent in Q4 to Rs 2,131 crore against Rs 1,937 crore in the corresponding quarter last year. Total expenses stood at Rs 1,789 crore in Q4 against Rs 1,593 crore in the corresponding quarter of last fiscal.

The company reported a consolidated net profit of Rs 777 crore in the last fiscal against net profit of Rs 1,252 crore in the previous year, indicating a fall of about 38 per cent year-on-year. Consolidated revenues from operations in the last fiscal stood at Rs 8,508 crore against Rs 8,005 crore in the previous fiscal.

Credit Suisse is positive on the outlook of the firm with a target price of Rs 3,500. It cited strong margin recovery and growth guidance in FY23 behind the stance. Torrent Pharma expects EBITDA margin to rise 300 bps in Q1 FY23, with a further expansion of 100 bps in rest of FY23. It expects double-digit revenue growth in both India and Brazil in FY23.

Jefferies has upgraded the stock to hold with a target price of Rs 2,573. It said revenue and EBITDA have come in line. It had assumed only 100 bps margin improvement QoQ. The brokerage is also bullish on guidance given by the firm. "From 1QFY23, management has guided to 300bps margin improvement on US facility discontinuation and reduction in facility overheads," it added.