Torrent Pharma's shares fell 4.26 percent to Rs 646.70 per share on the BSE during Wednesday's intraday trading. This was despite the Indian drugmaker reporting a robust April-June quarter for fiscal year 2024-25 (Q1FY25). However, several analysts have reduced the company's target price in light of its considerable increase over the last three months.
The pharma company had a strong June quarter, with net profit rising 21% year on year (Y-o-Y) to Rs 457 crore, up from Rs 378 crore in the same period previous year.
The company's revenue from operations increased by 10% year on year, rising to Rs 2,859 crore from Rs 2,591 crore in Q1FY24. Torrent Pharma's earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled Rs 904 crore, with an Ebitda margin of 32.3%.
Analysts at Nuvama Institutional Equities observed that Torrent Pharma's Q1FY25 performance was in line with consensus projections, while its adjusted performance, including Ebitda margin and PAT increase, was above expectations.
The pharmaceutical company's performance would have been even better, according to analysts. Going forward, fresh tender wins will boost growth momentum in Germany, while new launches may improve traction in the United States, according to brokerage company ICICI Securities.
Analysts at Nuvama predict that the company will continue to achieve double-digit revenue growth, driven by domestic chronic business, post-flood recovery in Brazil, and tender wins in Germany. US growth remains hampered by a lack of substantial launches, but new launches in FY26E should increase performance, they stated.
"We enhance our FY25/26E Ebitda by 2% each to account for higher margins. According to Abdulkader Puranwala and Nisha Shetty of ICICI Securities, the stock has returned 19% over the last three months, thus we have reduced our rating to ADD and raised the target price to Rs 3,360 on 25 times the FY26E EV/Ebitda.
Nuvama, on the other hand, maintained its 'Buy' rating on the firm, with a target price of Rs 3,606. The brokerage anticipates Torrent's sales and PAT to expand by 10% and 24%, respectively, over FY24-27. At 11:30 AM, the pharmaceutical company's shares were trading 2.92 percent lower on the BSE at Rs 3045.65 per share. In comparison, the BSE Sensex fell 0.29 percent to 80,194 levels.
