The company’s stock price fell more than 15 per cent on January 27, a day after Torrent Pharmaceuticals reported a 16 per cent decline in December quarter profits. Torrent Pharmaceuticals on Tuesday said its consolidated net profit declined to Rs 249 crore for the third quarter ended December 2021 due to sluggish performance in the US market. The drugmaker had made a net profit of Rs 297 crore in the October-December period of the financial year 2020-21.
Torrent Pharmaceuticals said in a statement that the company’s income from operations for the third quarter stood at Rs 2,108 crore as against Rs 1,995 crore a year ago. The company said its US business income during the period stood at Rs 235 crore, showing a decline of 20 per cent year-on-year.
The stock was trading at Rs 2,680.15, down Rs 480.40 or 15.20 per cent at 12:32 pm on the BSE. It has touched an intraday high of Rs 2,940 and an intraday low of Rs 2,642.05.
The stock was trading with a volume of 50,504 shares as against its five-day average of 3,925 shares, up 1,186.66 per cent.
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Global research and broking firm CLSA downgraded the stock with outperform buy rating and lowered the target to Rs 3,350 per share from Rs 3,850 per share. They are of the view that Q3 earnings were lower than anticipated, due to a sharp 5 ppt decline in annualized margins. India’s sales grew a solid 15 per cent year-on-year, but US and EU sales were lower than expected.
“Margins should improve in the two quarters driven by price increases in India and Brazil. Our outlook on the India business remains strong, which gives us a constructive view on the stock,” CLSA said.
Goldman Sachs, on the other hand, has given a ‘buy’ rating on the stock but has lowered the target to Rs 3,555 per share from Rs 3,555. The brokerage firm believes that Q3 results were worse than expected, with US concerns offsetting the performance of India and Brazil. Topline’s momentum in US business was weak. We have reduced the EPS estimates for FY 22-24 due to slow growth of margins.
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