440% Payout: Rs 2,600 Pharma Stock To Reward Rs26/Share Dividend In 11 Days; Brokerages Recommend BUY!

One of the leading pharma stocks, Torrent Pharmaceuticals dipped by 1.4% on its ex-dividend day. Despite the latest drop on February 12, the stock traded near its 52-week high of Rs 2,699.95 apiece. Brokerages have recommended buying Torrent Pharma shares for a target price in the range of Rs 2,700 to Rs 2,798.

Torrent Pharma Share Price:

On February 12, the day when Torrent Pharma turned ex-dividend, the stock price traded in the range of Rs 2,656.40 to Rs 2,603.60 apiece.

But the stock ended at Rs 2,620.40 apiece, down by 1.4% on BSE with a market cap of Rs 88,682.26 crore.

The stock is still near its 52-week high of Rs 2,699.95 apiece, and trading higher by 81.2%.

Torrent Pharma Dividend:

The pharma giant plans to pay dividends in 11 days. Firstly, the company declared an interim dividend of Rs 22/- (440%) per equity share of Rs 5/- fully paid up.

It said the dividend is expected to be paid/dispatched on or around 23rd February, 2024.

Torrent Pharma Earnings:

In Q3FY24, Torrent Pharma recorded revenue of Rs 2,732 crore, up by 10% YoY. Gross Margin stood at Rs 2,035 crore, posting a growth of 16% YoY. PAT stood at Rs 443 crore, recording a whopping 52% YoY growth. Torrent has outperformed the market across all focus therapies aided by strong new launch performance. India revenues at Rs 1,415 crores, were up by 12%.

Torrent Pharma, with annual revenues of more than Rs 9,600 crores, is the flagship Company of the Torrent Group, with group revenues of more than ~Rs 37,000 crores. It is ranked 5th in the Indian Pharmaceuticals Market and is amongst the Top 5 in the therapeutics segments of Cardiovascular (CV), Gastro Intestinal (GI), Central Nervous System (CNS), and Vitamins Minerals Nutritionals (VMN) and Cosmo-Dermatology.

Buy Torrent Pharma Share:

In its brokerage report, Prabhudas Lilladher said, Torrent Pharma's (TRP) Q3FY24 EBITDA/PAT was largely in line. Our FY25/ FY26E EBITDA stands increased by ~3%. TRP reported Rs 70bn (75% of total sales) worth of highly profitable branded formulation sales spread across India, Brazil and RoW markets. Curatio acquisition has been scaling up well with sharp margin improvement since acquisition. Historically TRP has successfully managed to integrate Unichem and Elder acquisition, which gives us comfort."

While Elara Capital's note said, Torrent Pharma (TRP) reported in-line Q3FY24, with revenue and EBITDA within 1% of our estimates. PAT came in 12% below due to higher depreciation & tax and lower other income. Lower US revenue was offset by better performance in branded businesses. EBITDA margin improved further by 80bps QoQ to an all-time high of 31.8%. The management has guided to for sustained improvement."

On the valuation, Prabhudas' report said, "We expect 17% EBITDA CAGR and 30% PAT CAGR over FY24-26E. Maintain 'BUY' rating with revised TP at Rs 2,700 valuing at 20x EV/EBITDA as we roll forward."

Further, Elara's note added, "We retain FY24E core earnings estimate but raise FY25E-26E estimates 4-5% on stronger growth in domestic and LatAm markets. TRP currently trades at 46.6x FY25E core earnings. We retain Accumulate and raise our TP to INR 2,798 from INR 2,225, on 43x (earlier 36x) FY26E core P/E plus cash per share."

Lastly, Elara's note said, "Higher EPS growth from waning interest cost, higher cash conversion and ease in overhang from Cipla acquisition justify higher valuation. Subnormal growth in the domestic business and value-dilutive, large acquisitions are key risks."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.