NTI: Shares of Torrent Pharmaceuticals took a hit on Wednesday, dropping nearly 4% during intraday trade as heavy selling activity dominated the counter. The stock saw high volumes, with over 1 crore shares—equivalent to a 3% stake—changing hands through a block deal within the first two hours of the session, sharply above the two-week average of 4,628 shares. This block deal, valued around ₹3,240 crore, was transacted at an average price of ₹3,108 per share, a 3% discount on the previous day’s close. While details of the buyers and sellers remained undisclosed, reports suggested that Torrent Investments, the promoter with a 71.25% stake, was likely reducing its holding.
As of the latest data, Torrent Pharma shares were trading down 2.24% at ₹3,139, bringing the company’s market capitalization to approximately ₹1.06 lakh crore. The stock opened lower for a third consecutive session at ₹3,130.10, down 2.5% from Tuesday’s close of ₹3,210.95 on the BSE, reaching an intraday low of ₹3,084.80—a decline of nearly 3.9%.
This recent downturn follows a three-day streak of losses, with Torrent Pharma’s stock shedding over 10% in value as investors capitalized on recent gains. The stock had previously surged to a 52-week high of ₹3,589.95 on October 10, 2024, having almost doubled since its 52-week low of ₹1,912.50 on November 1, 2023.
The sell-off comes shortly after Torrent Pharma reported its Q2 earnings for the period ending September 30, 2024. The Ahmedabad-based company posted a 17.4% year-on-year rise in consolidated net profit, reaching ₹453 crore compared to ₹386 crore in Q2 of the previous year. Revenue from operations also grew by 8.6% to ₹2,889 crore, led by strong domestic performance. The India segment, which contributed 56.5% of total revenue at ₹1,632 crore, grew by 13%, buoyed by key therapeutic areas. In its overseas markets, the company earned ₹263 crore from Brazil, ₹288 crore from Germany, and ₹268 crore from the U.S.
At the operational level, Torrent Pharma’s EBITDA increased 13.8% to ₹939 crore, with EBITDA margins expanding to 32.5%, up from 31% in Q2 of the previous fiscal. The company noted that insulin revenues were impacted due to a scheduled August shutdown for maintenance, with operations set to resume in December. This temporary shortfall is expected to be recovered by Q4, minimizing impact on annual results.
Following the Q2 results, brokerage Centrum downgraded Torrent Pharma to ‘Add’ with a target price of ₹3,350. Centrum remains optimistic about the company’s future performance, highlighting growth prospects across key segments: the domestic business driven by strong brands, expanding productivity in consumer health, and revenue gains in Brazil, Germany, and the U.S. Centrum projects a revenue CAGR of 14%, EBITDA CAGR of 18%, and EPS CAGR of 39% for FY24-26, with an anticipated 220 basis point increase in EBITDA margin to 33.6%.
