Torrent Pharmaceuticals shares slipped 8 per cent to Rs 1,525 on the BSE in the early morning trade on Tuesday after it reported a consolidated net loss of Rs 152 crore in March quarter (Q4FY19). The drug firm had posted a consolidated profit of Rs 228 crore in the year-ago quarter.
The net loss during the quarter was on account of one-time loss of Rs 357 crore due to Rs 217 crore impairment provisions on certain intangible assets and goodwill recognised as part of acquisition of Bio-Pharm Inc in the US as well as product recall charges of Rs 140 core in the US.
The company’s consolidated total income increased by seven per cent to Rs 1,873 crore in Q4FY19, up from Rs 1,750 crore in Q4FY18. Ebitda (earnings before interest, tax, depreciation and amortization) margin was down 187 bps at 25.5 per cent on sequential basis.
“Torrent's near-term revenue and profit growth is contingent on its branded business - India and Brazil (around 52 per cent of revenue and around 75 per cent of profit, in our view) - which have started to slow down. With US not picking up traction and losaran/losartan hctz being withdrawn, it is imperative that the branded business picks up to maintain premium to peers,” analysts at Antique Stock Broking said in the result review.
While margin pressure seems unlikely, revenue pressure from the US and slower-than-expected debt repayment forces us to reduce our FY20/21 estimate by 10 per cent, the brokerage firm said, maintaining ‘HOLD’ rating on the stock as the current price fairly captures the margin expansion (around 180bps from FY19 to FY21) and there is unlikely to be margin expansion beyond this as a lot of synergies have already started reflecting, it added.
At 09:47 am, Torrrent Pharma was trading 5 per cent lower at Rs 1,572 on the BSE, as compared to a 0.03 per cent rise in the S&P BSE Sensex. A combined 5,79,681 shares changed hands on the counter on the NSE and BSE till the time of writing this report.