Sharekhan Recommended Large cap Pharma Stock, Claims 19% Potential Upside, Buy

Leading brokerage firm Sharekhan has come up with a stock idea, assigned a "Buy" on Torrent Pharmaceuticals Ltd. with a target price of Rs 1,788/share. The stock is likely to surge, giving a potential upside of up to 19%. This is a large-cap pharma sector stock having a market capitalisation of Rs 51,198.33 crore.

Torrent Pharma's average sales growth stood at 13.5% (for January and February), beating the Indian Pharma Market's (IPM's) 11.3% growth for the same period. On a MAT basis, sales grew by 15.5% for February 2023 versus the IPM's 8.2%, according to Sharekhan.

Torrent Pharmaceuticals' stock outlook

The share price of Torrent Pharmaceuticals on NSE is currently trading at Rs 1,516.95/share, down 1.11% from its previous close of Rs 1,534/share.

The stock recorded 52 week low on 12 May 2022 at Rs 1,242.08/share and 52 week high on 9 November 2022 at Rs 1,750/share, respectively.

The stock has gained 0.09% in 1 week, and 1.9% in 1 month, respectively. In gained 5.06%, 59.46% in 3 years and 140.68% in 5 years respectively.

India sales stays ahead of market trend

According to Sharekha, Torrent Pharma's domestic average sales growth for the months of January and February (13.5%) has been above average market (Indian Pharma Market - IPM) growth (11.3%) for the same months, indicative of run rate for the company for Q4FY23E. On a moving annual total (MAT) basis, the company's sales growth was at 15.5% for Feb 2023 vs. 8.2% for IPM. The sales growth beat over IPM is likely to be driven by new product launches, performance of its top brands, strong growth in its newly acquired Curatio's portfolio, recent expansion of its field force and increase in their productivity.

Buy for a target price of Rs 1,788/share

Sharekhan, "Torrent Pharma's Q4FY23E growth run rate (as per AIOCD) as indicated by Jan and Feb 23's average IPM sales growth, is in line with our estimate. We, hence, maintain our overall revenue and earnings growth estimates at 12.3% and 19.5% CAGR, respectively over FY2022-FY2025E. At CMP, the stock trades at 31.3x/24.5x its FY24E/FY25E EPS, respectively. We maintain Buy on Torrent Pharma with an unchanged PT of Rs. 1,788."

According to Sharekhan, the Key to the "Buy" call would be Risks Delays in the resolution of USFDA issues at its plants and heightened competitive pressures in the US.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.