Weak US outlook in near term, higher costs to weigh on Torrent Pharma

While the stock has corrected, valuations leave little room for upside

A lower-than-expected performance in the December quarter, muted near-term outlook for its US business, and expected rise in costs led to a 6.4 per cent fall in the stock price of Torrent Pharmaceuticals. Given the headwinds, analysts have cut their net profit estimates by 4-8 per cent for FY22 and FY23.

The immediate trigger for the pressure on the stock was the poor Q3 showing, led disappointment in the US business. Revenues in the US business was down 24 per cent YoY and 9 per cent on a sequential basis.

Lack of new product launches, and pricing pressure, as well as the