Torrent Pharmaceuticals made headlines as its share price soared over 8% to hit a 52-week high following a robust performance in the fourth quarter of FY24.
Strong financial results, strategic decisions, and positive market sentiment drive this surge. Let’s break down the key highlights and what they mean for investors.
Torrent Pharma Strong Q4 performance
Torrent Pharmaceuticals reported a fantastic 56.45% jump in consolidated net profit for the March 2024 quarter, reaching ₹449 crore compared to ₹287 crore in the same period last year. This surge in profit is largely due to higher revenue, which grew by 10% year-on-year (YoY) to ₹2,745 crore from ₹2,491 crore.
Torrent Pharma Key revenue drivers
- India: Revenue in India increased by 10% to ₹1,380 crore, driven by price hikes, growth in top brands, and new launches.
- Brazil: Revenue grew by an impressive 17% to ₹372 crore, boosted by new product launches and improved volumes in top brands.
- Germany: Revenue was up by 11% to ₹280 crore, maintaining a strong performance in the European market.
- US: However, the US market saw a decline, with revenue down by 6% to ₹262 crore.
Torrent Pharma Market reaction
Following the announcement of these robust results, Torrent Pharma’s share price surged over 8%, hitting a 52-week high of ₹2,839.90 per share on the BSE. The company’s market capitalization is now close to ₹95,000 crore. This spike indicates investor confidence in the company’s strong performance and future prospects.
Torrent Pharma Dividend announcement and fundraising plans
Torrent Pharma’s board has recommended a final dividend of ₹6 per equity share, pending shareholder approval. This follows an interim dividend of ₹22 per share paid earlier in the year. If approved, the final dividend is set to be paid on or around July 31, 2024.
In addition to the dividend, the company plans to raise up to ₹5,000 crore by issuing equity shares, including convertible bonds and debentures. This fundraising initiative aims to support future growth and expansion plans.
Torrent Pharma Financial analysis
Let’s dive into some of the key financial metrics from the latest results:
- EBITDA: Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 21.5% to ₹883 crores in Q4 FY24 from ₹727 crores in Q4 FY23. The EBITDA margin also improved, standing at 32.2% compared to 29.2% in the previous fiscal quarter.
- Annual Performance: For the fiscal year ended March 31, 2024, Torrent Pharma reported a consolidated net profit of ₹1,656 crore, up from ₹1,245 crore the previous year. Revenue from operations for the full year was ₹10,728 crore, an 11.5% increase from ₹9,620 crore in FY23.
| (in Rs. Cr.) | MAR ’24 | DEC ’23 | SEP ’23 | JUN ’23 | MAR ’23 |
| Net Sales/Income from operations | 2,143.00 | 2,123.00 | 2,146.00 | 2,121.00 | 1,920.00 |
| Total Income From Operations | 2,143.00 | 2,123.00 | 2,146.00 | 2,121.00 | 1,920.00 |
| Other Income | 76.00 | -11.00 | 15.00 | 11.00 | 26.00 |
| P/L Before Exceptional Items & Tax | 530.00 | 430.00 | 482.00 | 475.00 | 328.00 |
| P/L Before Tax | 530.00 | 430.00 | 482.00 | 475.00 | 328.00 |
| Net Profit/(Loss) For the Period | 410.00 | 297.00 | 327.00 | 323.00 | 219.00 |
Brokerage stance
Despite the strong Q4 results, brokerage firms have largely maintained a neutral stance on Torrent Pharma. Kotak Institutional Equities highlighted that while the company’s earnings momentum is well-captured, it maintains a reduced rating with a revised fair value of ₹2,575 per share. This suggests that the current share price already reflects the company’s strong performance.
Motilal Oswal Finance Services noted that the subdued performance in the US market was offset by superior growth in Latin America and other regions. They highlighted Torrent Pharma’s 27% YoY earnings growth for FY24, driven by better-than-industry growth in the branded generics segment and a 190 basis points margin expansion.
Future Outlook
The future looks promising for Torrent Pharma, with the company’s management expecting continued growth in its domestic business, driven by the performance of top brands, higher field force productivity, and consumer health scale-up.
Although the US market presents challenges, the company’s strong performance in other regions provides a solid foundation for sustained growth.
Final Thoughts
Torrent Pharma’s impressive Q4 results and strategic moves have undoubtedly caught the attention of investors. The company is well-positioned for future growth with a solid performance across multiple markets, strategic fundraising plans, and a substantial dividend.
Keep an eye on this pharma giant as it continues to navigate the competitive landscape and strive for further success.
