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Buy Torrent Pharma; target of Rs 210: Karvy

Posted on: May 24th, 2009 and is filed under Brokerage Recommendations.

Karvy Stock Broking has maintained its buy rating on Torrent Pharmaceuticals with a price target of Rs 210, in its report dated 20 May, 2009.

“The net revenues for the quarter delivered decent growth of 24.3% y-o-y to Rs 4050 million compared to our estimates at Rs 3768 million mainly on back of strong growth witnessed from key markets like Europe, Heumann and rest of the world as well as better than expected results from contract manufacturing business. Despite reporting strong growth rate in revenues, the company’s EBITDA margins dropped to 13% compared to 15.82% in Q4FY08 due to net forex loss to the tune of 15.8 million, higher staff expenses on account of a new extra urban division, higher R & D expenses and bad debts of Rs 75 million in Q4FY09.”

“We are revising our FY10 net revenue estimates upwards by 3.3% to Rs 18943.6 million on account of better than estimated revenue growth reported for FY09 and improved revenues from Europe, Brazil, US, Russia and RoW markets. Currently, the stock is quoting at PE of 5.9x on FY10 EPS at Rs 26.3. We continue to rate the stock as ‘BUY’ and upgrade our price target by 5 % to Rs 210 based on 8x on FY10 basis,” says Karvy Stock Broking’s report.

source: MOneycontrol

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