Large Cap Pharma Co Announces 160% Dividend, Stock Rallies 6%, Gets 'Buy' Rating

Torrent Pharma is a large cap pharmaceutical company that has declared a final dividend of 160%. The company posted a strong quarter and has guided that would grow further. Even the stock has rallied by nearly 6% in Wednesday's trade. Based on its profit numbers and future estimates, a leading stock broking firm, Prabhudas Lilladher has suggested investors to buy shares as the stock can fetch a return of up to 10.85%.

Q4 Performance & Dividend Details

Torrent Pharma reported a consolidated net profit of Rs 287 crore for the March quarter, as against a net loss of Rs 118 crore last year.

In a board meeting held on 30th May 2023, the board of directors recommended a final dividend of Rs 8 (160%) per equity share of Rs 5 each. The final dividend amount, if declared by the Shareholders, is proposed to be paid/dispatched on or around 14th August 2023.

The company has fixed 23rd June 2023 as the record date for noting the names of the shareholders eligible to receive dividends.

Earlier, an interim dividend of Rs 14 (280%) per equity share was paid during the last quarter. Therefore, the total dividend declared for the financial year is Rs 22 per share.

Valuation & Rating

Prabhudas Lilladher, in its research note, has mentioned that Torrent Pharma's 4QFY23 EBITDA was largely in line. "However, its PAT was below our estimate led by higher tax and one-time inventory write-off," the note said.

The company has Rs 70 billion (75% of total sales) worth of highly profitable branded formulation sales spread across India, Brazil, and RoW markets. In the near term, Curatio's acquisition will increase the company's net debt and this acquisition is an EPS dilutive.

Additionally, the stock-broking firm suggests, "Historically, Torrent Pharma has successfully managed to integrate Unichem and Elder acquisition which gives us comfort. We expect a 17% EBITDA CAGR over FY23-25E. Maintain 'BUY' rating with a revised target price of Rs 1,900/share (Rs 1,820 earlier), 17x EV/EBITDA to FY25E."

Share Price Movement

The latest closing price of this large cap pharma stock is Rs 1,818.50. It has rallied by 6.05% over the previous day's closing price. In the last one year, the stock has given a return of 27.65% while over three years, it has managed to give a 53.75% return.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the author or the brokerage house will not 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.