19 May 2021
4QFY21 Results Update | Sector: Healthcare
Torrent Pharma
Neutral
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
CMP: INR2,723
Steady outperformance in the Branded Generics segment
US business at a trough; expect a gradual recovery from here on
TRP IN
169
460.9 / 6.3
3040 / 2232
1/-12/-58
1618
TP: INR2,530 (-7%)
Financials & Valuations (INR b)
Y/E MARCH
2021 2022E 2023E
Sales
80.1 90.1 99.4
EBITDA
25.0 27.9 30.3
Adj. PAT
12.7 14.6 16.4
EBIT Margin (%)
23.0 23.4 23.2
Cons. Adj. EPS (INR)
74.9 86.1 96.8
EPS Gr. (%)
33.5 14.9 12.5
BV/Sh. (INR)
345.0 387.3 449.2
Ratios
Net D:E
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
EV/EBITDA (x)
Div. Yield (%)
FCF Yield (%)
EV/Sales (x)
0.6
23.8
16.4
37.1
36.3
19.6
0.8
3.6
6.1
0.4
23.5
17.7
36.1
31.6
17.2
0.9
4.4
5.3
0.3
23.1
18.8
36.1
28.1
15.4
1.1
4.9
4.7
Product mix/controlled cost drive earnings in 4QFY21
TRP’s 4QFY21 result was marginally below our estimates at an operational
level, led by a sharp YoY decline in US and CRAMS sales. It continues to build
its product portfolio and enhance marketing efforts to outperform in Brazil,
Germany, and the Branded Generics segment in Domestic Formulation (DF).
It is also working on alternate site filings to reduce the regulatory risk in the
US Generics business.
We have maintained our FY22E/FY23E EPS estimate and continue to value
TRP at 25x 12-month forward earnings to arrive at a TP of INR2,530. Gradual
revival in demand for Branded Generics, with the lowering of COVID-19
caseloads; increasing vaccination pace in focus geographies of India, Brazil,
and Germany; and subsequent promotional efforts would enable the
company to deliver better growth in these markets going forward. The
ANDA pipeline remains healthy for the US market. However, product
approval largely hinges on the resolution of USFDA issues. We maintain our
Neutral rating as current valuation adequately factors in improving outlook
in DF/Germany/Brazil .
Revenue remained flat YoY at INR19.4b (est. INR20.4b) in 4QFY21. The
24%/10% YoY growth in Germany/DF (14%/48% of sales)
was
offset by a
30%/10% decline in US/Brazil (14%/10% of sales) in 4QFY21. Even
RoW/Contract Manufacturing sales fell 4%/10% YoY (10%/5% of sales).
Gross margin expanded 150bp YoY to 74.4% due to change in the product
mix. EBITDA margin expanded at a higher rate (190bp YoY) to 30% (est.
29.9%). EBITDA margin expansion was driven by lower other expense (-70bp
YoY as a percentage of sales), partially offset by higher employee cost.
EBITDA grew 6% YoY to INR5.8b (est. INR6.1b).
PAT grew at a higher rate (38% YoY) to INR3.2b (est: INR2.9b), due to better
EBITDA margin and higher other income, partially offset by a higher tax rate
in 4QFY21.
Sales remained almost flat YoY at INR80b in FY21, while EBITDA/PAT grew
15%/34% to INR25b/INR12.7b.
While the US business declined 30% YoY in 4QFY21 due to lack of approvals
and base business price erosion, TRP has taken measures like: a) transferring
products to alternate sites, b) re-start of commercialization from Levittown
facility from Jun’21, and c) re-launch of Sartans to mitigate the decline in US
sales over the near to medium term.
TRP awaits outcome of the district court on Para IV litigation for Dapsone.
It launched three products in the DF market during 4QFY21. About 6-7% of
growth is expected to be driven by better pricing.
MR strength/monthly productivity stands at 3,600/INR0.85m.
R&D for FY22 to be 6-6.5% of sales.
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-21 Dec-20 Mar-20
71.3
71.3
71.3
8.4
8.1
10.9
11.4
12.0
9.8
9.0
8.7
8.1
FII Includes depository receipts
Highlights from the management commentary
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Tushar Manudhane - Research Analyst
(Tushar.Manudhane@MotilalOswal.com)
Bharat Hegde, CFA
(Bharat.hegde@motilaloswal.com);
 Motilal Oswal Financial Services
Torrent Pharma
Valuation and view
We continue to value TRP at 25x 12-month forward earnings and arrive at price
target of INR2,530.
We expect 14% earnings CAGR, led by 11%/17%/8%/11% CAGR in
DF/US/Brazil/Germany sales, partially impacted by 70bp margin contraction,
with normalization in opex related to its sales force in the DF segment.
The current valuation captures upside in earnings over next two years
adequately. Hence, we maintain our Neutral rating on the stock.
FY21E
2Q
3Q
20,170 19,950
0.6
1.5
6,350
6,070
17.4
12.4
31.5
30.4
1,650
1,670
4,700
4,400
24.3
16.7
23.3
22.1
920
910
60
80
3,840
3,570
0
0
3,840
3,570
740
600
19.3
16.8
3,100
2,970
3,100
2,970
27.0
16.4
15.4
14.9
FY20
79,390
4.3
21,700
11.3
27.3
6,540
15,160
13.9
19.1
4,510
1,220
11,870
0
11,870
1,620
13.6
10,250
9,496
31.4
12.0
FY21
80,050
0.8
25,010
15.3
31.2
6,580
18,430
21.6
23.0
3,580
570
15,420
160
15,260
2,740
17.8
12,520
12,680
33.5
15.8
(INR m)
Var.
4QFY21E
20,357 -4.8
4.6
6,092 -4.5
11.2
29.9
1,707
4,384 -4.9
15.4
21.5
808
80
3,656 4.7
0
3,656
747
20.4
2,910
2,910 11.4
24.1
14.3
Quarterly performance (consolidated)
Y/E March
FY20
INR m
1Q
2Q
3Q
Net Revenue
20,220 20,050 19,660
YoY Change (%)
8.0
5.9
-1.1
EBITDA
5,410
5,410
5,400
YoY Change (%)
13.4
14.4
2.7
Margin (%)
26.8
27.0
27.5
Depreciation
1,600
1,630
1,630
EBIT
3,810
3,780
3,770
YoY Change (%)
16.5
17.8
1.9
Margin (%)
18.8
18.9
19.2
Interest
1,220
1,160
1,110
Other Income
200
340
530
PBT before EO Expense
2,790
2,960
3,190
Extra-Ord. Expense
0
0
0
PBT after EO Expense
2,790
2,960
3,190
Tax
630
520
680
Rate (%)
22.6
17.6
21.3
Reported PAT
2,160
2,440
2,510
Adjusted PAT
2,160
2,440
2,552
YoY Change (%)
32.5
36.3
18.6
Margin (%)
10.7
12.2
13.0
Key performance indicators (consolidated)
Y/E March
FY20
INR m
1Q
2Q
India Formulations
9,070
8,990
YoY Change (%)
9.3
10.2
US generics
3,760
3,800
YoY Change (%)
12.6
-3.6
Brazil
1,740
1,560
YoY Change (%)
3.0
6.1
Germany
2,620
2,500
YoY Change (%)
4.4
-0.4
RoW
1,790
1,970
YoY Change (%)
6.5
18.0
Contract manufacturing
1,270
1,230
YoY Change (%)
5.8
2.5
Cost Break-up
72.4
RM Cost (% of Sales)
27.6
26.8
Staff Cost (% of Sales)
18.8
17.9
Other Cost (% of Sales)
26.8
28.3
Gross Margin (%)
72.4
73.2
EBITDA Margin (%)
26.8
27.0
EBIT Margin (%)
18.8
18.9
4Q
19,460
4.8
5,480
15.9
28.2
1,680
3,800
21.4
19.5
1,020
150
2,930
0
2,930
-210
-7.2
3,140
2,344
41.5
12.0
1Q
20,560
1.7
6,770
25.1
32.9
1,610
5,160
35.4
25.1
1,020
40
4,180
160
4,020
810
19.4
3,210
3,370
56.0
16.4
4Q
19,370
-0.5
5,820
6.2
30.0
1,650
4,170
9.7
21.5
730
390
3,830
0
3,830
590
15.4
3,240
3,240
38.2
16.7
3Q
8,710
4.3
3,810
-22.2
1,890
12.5
2,190
-18.0
1,950
14.0
1,100
-8.3
27.6
18.0
27.0
72.4
27.5
19.2
4Q
8,400
11.4
3,850
3.5
1,960
-4.4
2,160
-9.6
2,040
13.3
1,060
1.0
27.1
17.3
27.4
72.9
28.2
19.5
1Q
9,250
2.0
3,730
-0.8
1,400
-19.5
2,460
-6.1
2,340
30.7
1,380
8.7
74.0
26.0
18.1
22.9
74.0
32.9
25.1
FY21
2Q
9,630
7.1
3,270
-13.9
1,290
-17.3
2,610
4.4
2,000
1.5
1,390
13.0
27.5
18.0
23.1
72.5
31.5
23.3
3Q
9,300
6.8
2,920
-23.4
1,730
-8.5
2,650
21.0
1,910
-2.1
1,450
31.8
28.2
18.2
23.2
71.8
30.4
22.1
4Q
9,220
9.8
2,690
-30.1
1,890
-3.6
2,670
23.6
1,950
-4.4
950
-10.4
25.6
17.6
26.7
74.4
30.0
21.5
FY20
35,170
8.8
15,230
-4.2
6,700
-2.8
9,470
-6.1
7,760
12.5
4,610
0.2
27.5
18.1
27.5
72.5
27.3
19.1
FY21
37,390
6.3
12,612
-17.2
6,302
-5.9
10,382
9.6
8,202
5.7
5,162
12.0
26.8
18.0
23.9
73.2
31.2
23.0
4QFY21E
9,452
12.5
2,875
-25.3
1,950
-0.5
2,584
19.6
2,087
2.3
1,380
30.2
28.0
17.3
24.8
72.0
29.9
21.5
19 May 2021
2
 Motilal Oswal Financial Services
Torrent Pharma
Highlights from the management commentary
On the back of low single-digit growth in the German market, TRP intends to
grow in high single-digits, led by resolution of quality issues and enhanced
marketing efforts.
The Branded Generic market in Brazil grew 5% YoY in the past 12-months. TRP
grew by 19% YoY in CC terms over the same period, led by market share gains in
its strong brands. The management intends to discontinue the tender business,
which accounts for ~10% of Brazil sales, from Oct’21 onwards.
CRAMS business was impacted in 4QFY21 from re-validation requested by Novo
Nordisk and maintenance activities at the plant.
ETR is expected to be 22-25% in FY22.
TRP would incur a capex of INR2-2.5b in FY22, largely towards maintenance.
Capex was ~INR3b in FY21.
Its medium term goal is to launch 10-12 products on an annualized basis for the
US market.
COVID-19 products: TRP has entered into an agreement with Eli Lilly for
manufacture of Baricitinib. It is also in talks with other players for a few other
COVID-related products.
TRP reduced debt by INR9b in FY21 and intends to reduce the same by a similar
amount in FY22.
Key exhibits
Exhibit 1:
US sales decline 21% YoY in USD terms
US Sales (USD Mn)
52
54
52
54
47
50
12.0
Exhibit 2:
India sales grew 10% YoY
India Sales (INR b)
YoY growth (%)
2.0
7.1
6.8
9.8
15.0
43
8.8
9.3
10.2
11.4
4.3
39
10.0
37
10.0
5.0
8.0
0.0
6.0
-5.0
4.0
-10.0
2.0
7.5
9.1
9.0
8.7
8.4
9.3
9.6
9.3
9.2
-15.0
0.0
-20.0
Source: MOFSL, Company
Source: MOFSL, Company
19 May 2021
3
 Motilal Oswal Financial Services
Torrent Pharma
Exhibit 3:
Europe sales rose ~24% YoY in 4QFY21
Germany Sales (INR b)
3.0
Exhibit 4: Brazil sales fell 4% YoY due to forex headwinds
Brazil Sales (INR b)
30.0
2.5
YoY growth (%)
21.0
23.6
3.0
YoY growth (%)
20.0
6.1
12.5
-4.4
-19.5 -17.3
-8.5
-3.6
2.5
2.0
-3.6
2.4
4.4
-0.4
-18.0
4.4
-9.6
2.2
-6.1
2.5
2.6
2.7
2.7
20.0
2.0
-4.7
10.0
10.0
0.0
1.5
1.5
0.0
-10.0
1.0
1.0
-10.0
-20.0
0.5
2.6
2.5
0.5
-20.0
0.0
2.2
2.1
1.7
1.6
1.9
2.0
1.4
1.3
1.7
1.9
-30.0
-30.0
0.0
-40.0
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5:
EBITDA margin improves 180bp YoY
EBITDA (INR b)
8.0
7.0
Exhibit 6:
Adjusted PAT rose 38% YoY
Adj. PAT (INR b)
35.0
4.0
3.5
25.5
26.8
27.0
27.5
28.2
EBITDA (Margin %)
32.9 31.5
30.4 30.0
YoY Growth (%)
56.0
27.0
16.4
80.0
30.0
6.0
25.0
3.0
5.0
20.0
2.5
12.5
1.7
32.5
36.3
41.5
18.6
38.2
60.0
40.0
4.0
2.0
20.0
15.0
3.0
1.5
-
10.0
2.0
1.0
1.0
4.7
5.4
5.4
5.4
5.5
6.8
6.4
6.1
5.8
5.0
0.5
2.2
2.4
2.6
2.3
3.4
3.1
3.0
3.2
(20.0)
0.0
0.0
0.0
(40.0)
Source: MOSL, Company
Source: MOSL, Company
Valuation and view
DF – New launches/price hikes to sustain better than industry sales growth
TRP outperformed the India Pharma market (IPM) in FY21, posting a sales growth of
6% YoY to INR37.4b, led by steady growth in Chronic and sub-Chronic therapies
(76% of its DF portfolio). This was partially offset to some extent by a decline in
Acute therapies. Growth in the DF market was supported by 20 new product
launches and 6-7% price increase over the past 12 months.
TRP has completed restructuring its field force in the DF segment to improve
efficiency, which led to the reduction of ~400 MRs. Its MR strength now stands at
~3,600, with a PCPM of INR0.85m. Most of its field force is focused on reaching
specialists. TRP intends to increase PCPM by 20% before expanding its field force. Its
biggest brand Shelcal has benefited from the increase in demand for Vitamins and
Supplements due to COVID-19. We expect 11% sales CAGR in the DF segment over
FY21-23E. In addition to its tie-up with Eli Lilly for Baricitinib, TRP is also looking at
more partnerships to introduce COVID-19 drugs in the DF market. This may provide
an upside to our estimates.
US Generics: Levittown site re-start/favorable Para IV litigation outcome to
mitigate decline over the medium term
US sales declined 17% YoY to INR12.6b in FY21. Lack of new launches and
discontinuation of Sartans has led to severe price erosion in the base business. TRP
has completed CAPA at its Indrad and Dahej plants, which remains under OAI/WL,
19 May 2021
4
 Motilal Oswal Financial Services
Torrent Pharma
and awaits USFDA’s directives to get these facilities cleared. Its Levittown facility is
expected to start commercial manufacturing from Jun’21 and is working to shift a
few products to alternate sites of third parties. It is also planning to re-launch
Sartans in the US in Jun’21. It is also awaiting outcome of the Para IV litigation for
Dapsone, which can stem the decline in the US business. We expect 17% sales CAGR
in the US over FY21-23E.
Brazil: Strong portfolio to lead to outperformance
In constant currency terms, revenue grew 14% YoY in Brazil (down 3% in INR terms)
in FY21. Despite the severe impact of COVID-19 in Brazil, TRP outperformed the
domestic market by ~200bp. It has decided to exit the tender business in Brazil
entirely from Oct’21, which will bolster margin and reduce lumpiness in the
business. It’s entirely Chronic portfolio and a long-established presence in Brazil is
expected to drive 8% sales CAGR over FY21-23E.
Expect Germany to deliver high single/low double-digit growth
Sales in Germany grew 10% YoY (23% in 4Q) to INR1b in FY21. The impact of COVID-
19 on the business in 4QFY21 slowed down TRP’s recovery. It intends to grow by
higher single-digits v/s low single-digits for the market, and aims to be in the top
three generic companies in Germany in the near future, with 9-10% market share
(from 7% currently), on the back of new launches and increased traction in existing
products. We expect Germany to deliver 11% sales CAGR over FY21-23E.
Expect 14% EPS growth over FY21-23E
We have maintained our FY22E/FY23E EPS estimate and continue to value TRP at
25x 12-month forward earnings to arrive at a TP of INR2,530. Gradual revival in
demand for Branded Generics, with the lowering of COVID-19 caseloads; increasing
vaccination pace in focus geographies of India, Brazil, and Germany; and subsequent
promotional efforts would enable the company to deliver better growth in these
markets going forward. The ANDA pipeline remains healthy for the US market.
However, product approval largely hinges on the resolution of USFDA issues. We
maintain our Neutral rating as current valuation adequately factors in improving
outlook in DF/Germany/Brazil.
Exhibit 7: P/E chart
42.0
34.0
26.0
18.0
10.0
2.0
10.2
P/E (x)
Min (x)
Avg (x)
+1SD
31.3
23.1
15.0
28.2
Max (x)
-1SD
37.5
Exhibit 8: P/B chart
9.0
7.0
5.0
3.0
1.0
5.0
3.0
P/B (x)
Min (x)
Avg (x)
+1SD
6.3
6.4
3.8
Max (x)
-1SD
7.8
Source: MOFSL, Company, Bloomberg
Source: MOFSL, Company, Bloomberg
19 May 2021
5
 Motilal Oswal Financial Services
Torrent Pharma
Story in charts
Exhibit 9: Expect 12% CAGR in Formulations over FY21-23E
120
Exhibit 10: EBITDA margin to moderate on higher opex
EBITDA (INRb)
40.0
Formulations (INR b)
4.6
5.5
53.1
4.1
72.1
CRAMS (INR b)
4.6
5.2
5.5
5.9
EBITDA Margin (%)
50
40.7
21.9
23.5
23.3 25.6
27.3
31.2
31.0
30.5
80
6.0
2.3
40
40
30.0
30
43.6
0
60.8
55.9
74.3
74.9
84.5
93.5
20.0
20
10.0
10
10.2
0.0
27.2
13.8
14.0
19.5
21.7
25.0
27.9
30.3
0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
Exhibit 11: Chronic segment to drive DF revenue
38.5
50.0
45.0
40.0
Exhibit 12: US revenue to pick up from FY22E
US Revenues (USDm)
450
40
400
Domestic business (INR b)
37.6
YoY Growth (%)
YoY Growth (%)
250
200.1
350
150
30
300
35.0
30.0
25.0
13.4
16.1
18.3
18.9
8.3
19.8
23.5
32.3
8.8
35.2
12.0
6.3
37.4
41.9
20
250
200
7.8
-51.2
137
412
201
20.0
10.0
10
-15.8
169
34.2
-8.9
207
-17.9
170
19.8
12.2
50
150
15.0
100
-50
10.0
5.0
46.1
0
50
227
204
229
-150
0.0
-
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
Exhibit 13: Expect ~8% sales CAGR in Brazil over FY21-23E
Brazil revenues (INR b)
8.0
Exhibit 14: Expect 11% sales CAGR in Europe over FY21-23E
Germany revenues (INR b)
15.0
80
YoY Growth (%)
YoY Growth (%)
80
7.0
38.3
13.5
-16.5
6.1
5.1
7.0
1.3
-2.8
-2.8
-5.9
10.0
7.0
30
12.0
6.0
9.0
5.0
-0.6
4.9
-16.3
12.5 10.6
-6.1
9.6
10.0
12.0
30
4.0
6.0
3.0
-20
-20
2.0
3.0
1.0
7.1
6.9
6.7
6.3
6.9
7.4
-70
0.0
9.2
7.7
8.1
9.1
10.1
9.5
10.4
11.4
12.8
-70
0.0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22E FY23E
Source: Company, MOFSL
19 May 2021
6
 Motilal Oswal Financial Services
Torrent Pharma
Financials and valuations
Income Statement
Y/E March
Net Sales
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT before EO Expense
EO Expense/(Income)
PBT after EO Expense
Tax
Tax Rate (%)
Reported PAT
Less: Minority Interest
Net Profit
Adj. PAT
FY15
46,530
11.2
10,202
21.9
1,907
8,295
1,752
2,856
9,398
0
9,398
1,888
20.1
7,510
0
7,510
5,650
FY16
66,760
43.5
27,201
40.7
2,460
24,741
1,859
2,156
25,039
1,400
23,639
5,601
22.4
18,038
0
18,038
10,109
FY17
58,570
-12.3
13,774
23.5
3,070
10,704
2,060
2,230
10,874
0
10,874
1,540
14.2
9,334
0
9,334
9,334
FY18
60,020
2.5
13,990
23.3
4,090
9,900
3,080
2,990
9,810
500
9,310
2,530
25.8
6,780
0
7,782
7,782
FY19
76,100
26.8
19,490
25.6
6,180
13,310
5,040
570
8,840
3,220
5,620
1,260
14.3
4,360
0
7,228
7,228
FY20
79,390
4.3
21,700
27.3
6,540
15,160
4,510
1,220
11,870
0
11,870
1,620
13.6
10,250
0
10,250
9,496
FY21
80,050
0.8
25,010
31.2
6,580
18,430
3,580
570
15,420
160
15,260
2,930
19.0
12,330
0
12,330
12,680
FY22E
90,054
12.5
27,917
31.0
6,872
21,045
2,801
200
18,444
0
18,444
3,873
21.0
14,571
0
14,571
14,571
(INR m)
FY23E
99,374
10.3
30,309
30.5
7,217
23,092
2,336
250
21,006
0
21,006
4,621
22.0
16,385
0
16,385
16,385
Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Minority Interest
Deferred liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability and Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
FY15
846
24,059
24,906
4
1047
25,040
50,997
35,429
7,103
28,327
6,783
2,977
40,183
10,672
15,945
5,674
7,892
27,273
22,890
4,383
12,910
50,996
FY16
846
34,095
34,941
5
-1114
18,534
52,365
34,661
6,070
28,591
10,416
1
48,739
13,580
14,451
6,470
14,238
35,382
31,644
3,738
13,358
52,365
FY17
846
42,655
43,501
5
-2085
22,408
63,830
44,172
7,288
36,884
5,195
1
56,071
15,592
13,442
8,937
18,100
34,321
30,384
3,937
21,750
63,830
FY18
850
45,370
46,220
10
-2760
57,370
100,840
92,168
11,378
80,790
4,230
0
54,650
19,660
12,540
8,670
13,780
38,830
32,690
6,140
15,820
100,840
FY19
850
46,390
47,240
0
-3630
48,540
92,150
99,848
17,558
82,290
4,790
50
50,380
19,350
14,360
8,160
8,510
45,360
38,330
7,030
5,020
92,150
FY20
850
47,390
48,240
0
-4330
44,080
87,990
102,918
24,098
78,820
7,120
40
50,070
21,480
16,490
6,660
5,440
48,060
40,490
7,570
2,010
87,990
FY21
850
57,530
58,380
0
-4210
36,450
90,620
102,848
30,678
72,170
8,710
440
55,220
26,810
15,230
6,040
7,140
45,920
37,910
8,010
9,300
90,620
FY22E
850
64,696
65,546
0
-4210
29,450
90,786
105,848
37,550
68,298
8,710
440
61,488
22,890
21,613
9,249
7,736
48,149
39,624
8,525
13,339
90,786
(INR m)
FY23E
850
75,165
76,015
0
-4210
22,450
94,255
108,849
44,767
64,082
8,710
440
74,480
25,534
23,850
16,714
8,382
53,457
44,201
9,255
21,024
94,255
19 May 2021
7
 Motilal Oswal Financial Services
Torrent Pharma
Financials and valuations
Ratios
Y/E March
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Debtor (Days)
Inventory (Days)
Leverage Ratio (x)
Interest Coverage Ratio
Debt/Equity
Cash Flow Statement
Y/E March
Oper. Profit/(Loss) before Tax
Interest/Dividends Recd.
Direct Taxes Paid
(Inc.)/Dec. in WC
CF from Operating incl. EO Expense
(Inc.)/Dec. in FA
Free Cash Flow
(Pur.)/Sale of Investments
CF from Investments
Issue of shares
(Inc.)/Dec. in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc./Dec. in Cash
Opening Balance
Add/(less) Forex in Cash/Cash eq.
Closing Cash and Cash Eq.
Bank balances*
Total Cash and Cash Eq.
FY15
33.4
55.7
147.2
11.3
29.7
81.5
48.9
18.5
10.3
47.0
0.4
25.7
22.2
26.0
106
84
4.7
1.0
FY15
11,306
1,472
-582
-4,094
8,102
-2,364
5,738
-19,259
-21,623
0
16,062
-1,949
-1,997
12,123
-1,399
9,551
498
8,650
-2,976
5,674
FY16
59.7
121.1
206.5
41.2
46.6
45.6
22.5
13.2
7.1
17.4
1.5
33.8
40.4
54.1
83
74
13.3
0.5
FY16
25,810
3,149
-5,773
4,236
27,421
-5,925
21,496
-2,454
-8,379
0
-3,837
-2,117
-10,922
-16,877
2,166
8,650
-316
10,499
-4,029
6,470
FY17
55.2
73.3
257.1
10.0
21.9
49.4
37.1
10.6
8.1
34.4
0.4
23.8
18.6
21.6
87
97
5.2
0.5
FY17
13,950
1,234
-3,843
-1,252
10,088
-4,859
5,230
-3,010
-7,869
0
2,020
-1,913
-2,037
-1,929
290
10,499
-113
10,676
-1,739
8,937
FY18
46.0
70.2
273.1
13.0
39.1
59.2
38.8
10.0
8.5
36.4
0.5
17.3
11.3
10.7
79
120
3.2
1.2
FY18
13,396
1,983
-2,836
-3,602
8,942
-7,892
1,050
-39,178
-47,070
0
39,578
-2,757
-2,648
34,174
-3,954
10,676
246
7,020
1,650
8,670
FY19
42.7
79.2
279.2
18.0
84.4
63.7
34.4
9.8
6.6
25.7
0.7
15.5
11.9
13.7
65
93
2.6
1.0
FY19
11,794
8,005
-2,812
994
17,981
-6,605
11,376
4,192
-2,413
0
-5,013
-5,034
-3,097
-13,145
2,424
7,020
-43
9,401
-1,241
8,160
FY20
56.1
99.2
285.1
32.0
63.6
48.5
27.4
9.5
6.3
23.0
1.2
19.9
15.0
17.1
71
99
3.4
0.9
FY20
18,410
2,207
-2,840
-3,858
13,918
-4,028
9,890
2,513
-1,516
0
-3,129
-4,854
-7,185
-15,490
-3,088
9,401
306
6,618
42
6,660
FY21
74.9
111.7
345.0
22.5
37.1
36.3
24.4
7.9
6.1
19.6
0.8
23.8
16.4
20.0
72
122
5.1
0.6
FY21
21,840
3,400
-1,760
-3,370
20,110
-3,340
16,770
-1,150
-4,490
0
-9,220
-3,610
-3,380
-16,560
-940
6,618
362
6,040
6,040
FY22E
86.1
126.7
387.3
25.8
36.1
31.6
21.5
7.0
5.3
17.2
0.9
23.5
17.7
22.5
75
93
7.5
0.4
FY22E
25,316
2,601
-3,873
-830
23,214
-3,000
20,214
200
-2,800
0
-9,143
-2,801
-5,261
-17,205
3,209
6,040
0
9,249
9,249
FY23E
96.8
139.5
449.2
29.0
36.1
28.1
19.5
6.1
4.7
15.4
1.1
23.1
18.8
25.6
83
94
9.9
0.3
(INR m)
FY23E
28,223
2,086
-4,621
-220
25,468
-3,001
22,467
250
-2,751
0
-7,000
-2,336
-5,916
-15,252
7,465
9,249
0
16,714
16,714
19 May 2021
8
 Motilal Oswal Financial Services
Torrent Pharma
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
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available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
merchant banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Financial Services Limited are available on the
website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
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dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
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The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
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For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
19 May 2021
9
 Motilal Oswal Financial Services
Torrent Pharma
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
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misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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