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Business News/ Markets / Stock Markets1 lakh skyrocketed 1000 times to 17 Cr after 3 bonus shares: Buy the stock
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₹1 lakh skyrocketed 1000 times to ₹17 Cr after 3 bonus shares: Buy the stock

With a market capitalization of ₹51,456.63 Crore, Torrent Pharmaceuticals Ltd. is a large cap company in the pharmaceutical industry

Torrent Pharmaceuticals Ltd. shares ended trading today at Rs. 1,516.05 a piece, up 0.44% from the previous close (istockphoto)Premium
Torrent Pharmaceuticals Ltd. shares ended trading today at Rs. 1,516.05 a piece, up 0.44% from the previous close (istockphoto)

With a market capitalization of 51,456.63 Crore, Torrent Pharmaceuticals Ltd. is a large cap company in the pharmaceutical industry. One of the top pharmaceutical firms in the nation is Torrent Pharma, the flagship entity of the Torrent Group. Torrent Pharma is classified as no.1 among Indian companies for having the largest market share in Brazil and Germany. The company also has a sizable footprint in the diabetology, pain management, gynaecology, oncology, and anti-infective categories. It is also regarded as a pioneer in the therapeutic fields of cardiovascular (CV), central nervous system (CNS), gastro-intestinal (GI) and women healthcare (WHC). One of the well-known multibagger stocks that have made investors crorepati throughout the course of a long-term shareholding is Torrent Pharma, let’s know-how.

Share price and bonus history

Torrent Pharmaceuticals Ltd. shares ended trading today at Rs. 1,516.05 a piece, up 0.44% from the previous close. From 7.04 on July 6th, 2001, to the current market price, the stock price has soared tremendously, logging a multibagger return and an all-time high of 21,434.80%.

At its inception, the company's stock price was Rs. 7.04. A shareholder at the time would have held 14,204 shares of the corporation if they had made an investment of Rs. 1 lakh in the stock. The firm has announced bonus issues three times: first in 2006 at a 1:1 ratio, once in 2013 at a 1:1 ratio, and most recently in 2022 at a 1:1 ratio.

On February 20, 2006, the company issued its first bonus at a 1:1 ratio. As was previously noted, if an investor held 14,204 shares of the firm at the beginning, following the bonus declaration, the shareholding would have doubled to 28,408 shares, changing both the investor's value and shareholding percentage. In a short period of time after that, it again offered bonus shares in the years 2013 and 2022, both in the ratio of 1:1, increasing the shareholder's total share count to 1,13,632 after receiving 3 bonus shares and raising the value of the initial investment by more than 1000 times, or more than Rs. 17.22 Crore i.e. (1,13,632 shares x 1,516 current market price).  

Q1FY23 results of Torrent Pharma

On a consolidated basis, the company reported net sales of 2347 Cr in the quarter ended June 2022 compared to 2134 Cr recorded in Q1FY22 which represents a YoY growth of 10%. The company's total expenses reached 2377 Cr in Q1FY23 compared to 2174 Cr recorded in the year-ago quarter, representing a YoY growth of 9.33%. The company reported a gross profit of 1,687 Cr in Q1FY23 compared to 1,546 Cr recorded in Q1FY22, representing a YoY growth of 9%.

The company's profit before tax (PBT) jumped 9.91% YoY from 484 Cr recorded in Q1FY22 to 532 Cr in Q1FY23. The company's profit after tax (PAT) or net profit jumped 7% YoY from 330 Cr recorded in Q1FY22 to 354 Cr in Q1FY23 and EBITDA grew by 3% YoY from 717 Cr in the quarter of June 2021 to 742 Cr in the quarter ended June 2022. The company's EPS jumped from 19.53 in the year-ago quarter to 20.90 in Q1FY23.

Furthermore, on a standalone basis, the company recorded revenue from operations of 1933 Cr in Q1FY23 compared to 1695 Cr in Q1FY22, representing a YoY rise of 14%. PAT climbed by 19% YoY from 274 Cr in Q1FY22 to 327 Cr in Q1FY23, while PBT improved by 19.90% YoY from 412 Cr in Q1FY22 to 494 Cr.

Should you buy the shares of Torrent Pharma?

Based on the Q1 performance of Torrent Pharma, the research analysts of the broking firm Sharekhan have said in their research report that “ Torrent sees a healthy outlook for India business, backed by expanding reach, market share gains, and likely traction in the new trade generics division. Expected growth in the existing portfolio, and plans to fortify presence in the covered markets, would drive Brazilian sales growth, while elevated cost pressures, price erosion, and delays in re-inspection for plants by USFDA could slow down US growth momentum. At CMP, the stock trades at 33.2x/27.1x its FY2023E and FY2024E. Given better growth prospects across Indian and Brazilian businesses, we retain our Buy recommendation on the stock with a revised PT of 1820."

The research analysts of the broking firm Prabhudas Lilladher Pvt. Ltd has said “Torrent Pharma’s (TRP) revenue growth across key branded generic markets were healthy which is likely to sustain. Further price hike in branded generic business and cost optimization steps have aided margins. TRP’s high exposure to branded generic business (~70% of total revenues) and chronic therapies provides comfort. Going ahead, timely resolution of plants will pickup revenue growth in US and benefit operating leverage. We expect 21% EPS CAGR over FY22-24E. Our FY23 and FY24E EPS broadly remains unchanged. Maintain ‘Buy’ rating with revised TP of 1,750/share (Rs1625 earlier), 32x FY24E EPS."

The research analysts of the broking firm Anand Rathi have said “Backed by growth in its BGx business in India, Brazil and the RoW, Torrent’s Q1 revenue grew 10% y/y to Rs23.5bn. Its gross margin expanded 107bps q/q to 72% chiefly due to the higher BGx and gDapsone contribution. Lower other expenses (discontinued liquids business in the US) and R&D expenditure (5% of sales) resulted in a 401bp q/q EBITDA margin improvement to 30.3%. Ahead, continued growth and product launches in India, Brazil and the RoW, and cost efficiencies (discontinued liquids business in the US) would drive revenue, EBITDA and PAT CAGRs of 10%, 15% and 24% respectively over FY22-24. We maintain a Buy on the stock, with a TP of 1,724, valuing it at FY24e 19x EV/EBITDA."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

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ABOUT THE AUTHOR
Vipul Das
Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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Published: 09 Sep 2022, 10:39 PM IST
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