Mehabe score: 7 G Factor: 1 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 1 and Piotski score of 8.
Description
Torrent Pharmaceuticals is one of the leading Indian Pharmaceutical Company engaged in research, development, manufacturing and marketing of generic pharmaceutical formulations.Site:TORNTPHARMMain Symbol:TORNTPHARM
Stock trades at 2950.0, above its 50dma 2785.77. It also trades above its 200dma 2636.13. The stock remains bullish on techicals
The 52 week high is at 3040.00 and the 52week low is at 2231.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has been maintaining a healthy dividend payout of 55.37%
Weakness
– Stock is trading at 8.55 times its book value
-The company has delivered a poor sales growth of 3.66% over past five years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 31.0x. Sun Pharma.Inds. trades at the industry’s max P/E of 56.29x. TORNTPHARM trades at a P/E of 39.9x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 8.0. TORNTPHARM has a G-Factor of 1 and Piotski scoreof 8.
– Average 1 month return for industry is 6.3%. The max 1- month return was given by Piramal Enterp.: a return of 24.72 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1937.0 cr compared to Rs 1946.0 cr for period ended Mar 2020, a fall of 0.5%
Operating Profits reported at Rs 582.0 cr for period ended Mar 2021 vis-vis 548.0 for period ended Mar 2020 .
Operating Margins expanded 188.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 19.15 compared to Rs 17.55 for previous quarter ended Dec 2020 and Rs 18.56 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8005.0 cr for period ended Mar 2021 vis-vis sales of Rs 7939.0 cr for the period ended Mar 2020, a growth of 0.8%. The 3 year sales cagr stood at 10.4%.
Operating margins expanded to 31.0% for period ended Mar 2021 vis-vis 27.0% for period ended Mar 2020, expansion of 400.0 bps.
Net Profit reported at Rs 1252.0 cr for period ended Mar 2021 vis-vis sales of Rs 1025.0 cr for the period ended Mar 2020, rising 18.1%.
Company recorded a healthy Net Profit CAGR of 22.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 2011.0 cr for period ended Mar 2021 vis-vis Rs 1392.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 23.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 23% on a 1 Year basis vis-vis a return of 28% over the last 3 Years. – The compounded sales growth on a TTM bassis is 1% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 25% vis-vis a compounded profit growth of 25% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 11.37% vis-vis 11.96% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 9.03% vis-vis 8.7% for Dec 2020
Conclusion
– has reduced debt.
– has been maintaining a healthy dividend payout of 55.37% – Stock is trading at 8.55 times its book value
-The company has delivered a poor sales growth of 3.66% over past five years.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 2785.77 and is trading at 2950.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
