Torrent Pharma shares drop 14% after reporting decline in profit in December; Sharekhan assigns buy rating, sees 24% upside from today's low

Shares of Torrent Pharma were locked in lower circuit as they declined 13 per cent to Rs 2704.80 per share in Thursday's intraday trade on the BSE. The fall in the share price comes as the drug maker Drug marker reported a 16.16% YoY decline in net profit at Rs 249 crore for the quarter ended December 31, 2021. On the NSE, the shares corrected more than 14 per cent to touch day's low of Rs 2,705.30 per share.  

Meanwhile, brokerage firm Sharekhan has assigned buy rating to this pharma stock anticipating better growth prospects across Indian and Brazilian business. "We retain our 'Buy' recommendation on the stock with a revised PT of Rs. 3,540," it said. 

Torrent Pharma shares have traded flat with marginal 5 per cent upside in the last one year on the NSE as on January 27.  At 9.45 am, shares of this Torrent Pharmaceuticals Limited were trading lower by Rs 405.20 or 12.82% to Rs 2755.35 apiece on the BSE as the markets corrected nearly 2 per cent in the opening trade on Thursday. The correction in the market comes amid US fed meeting outcome and tension between Russia and Ukraine, besides FIIs relentless selling.  

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Earlier, a profit of Rs 297 crore in the December 2020 quarter, Torrent Pharmaceuticals witnessed a 16.16% YoY drop in net profit at Rs 249 crore for the quarter ended December 31, 2021.  

The company's revenue from operations grew 5.66% YoY to Rs 2,108 crore in the period under consideration as against Rs 1,995 crore posted last year.  

EBITDA declined 11.36% YoY to Rs 538 crore as against Rs 607 crore posted last year.  

As per Share Khan Torrent derives nearly 60% of its sales collectively from Indian and Brazilian markets and management sees these two geographies as key growth drivers. 

"Performance of the US business could be under pressure impacted by price erosion and absence of new launches due to delays in plant re-inspection," it added. 

Earlier, the board of directors of Torrent Pharma also has declared an interim dividend of Rs 25 per equity share.