On Monday, Citi analyst increased the price target for Torrent Pharma (TRP:IN) to INR4,000, up from INR3,940, while reiterating a Buy rating on the company’s shares. The revision follows the company’s third-quarter financial results, which fell short of market expectations, with EBITDA coming in 4% below projections. This shortfall was attributed to a significant devaluation of the Brazilian Real (BRL) and a temporary shutdown of the plant involved in the Insulin Contract Manufacturing Organization (CMO) business.
Despite these challenges, Torrent Pharma reported robust underlying trends, with a 12% year-over-year growth in India and a 10% increase in Brazil on a constant currency basis. The company’s EBITDA margins remained stable at 32.5%, unchanged from the previous quarter and showing a 70 basis points improvement from the same period last year.
Torrent Pharma anticipates a full recovery of its Insulin CMO business in the fourth quarter. The company also expects to mitigate the impact of currency fluctuations through significant price adjustments in the Brazilian market in the coming year. Optimism was expressed regarding the potential for further margin expansion by fiscal year 2026 and a strong market share in the GLP-1 generic segment in both Brazil and India, bolstered by Torrent Pharma’s established presence in the cardio-metabolic areas.
Citi’s maintained Buy rating and the adjusted price target reflect the firm’s confidence in Torrent Pharma’s capacity to overcome recent operational disruptions and capitalize on market opportunities. The company’s positive outlook on margin growth and strategic positioning in key markets underpin the analyst’s expectations for the stock’s performance.
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