Torrent Pharmaceuticals Ltd Research Report By IndiaNivesh

We expect Torrent Pharmaceuticals (TRP) to have sales of US$130mn for FY16E from g-Abilify opportunity. Given the market size of Abilify to be ~US$5bn on annual basis, at-risk launch and one among the few early entrants for generic version of Abilify in US market, we expect TRP to have considerable traction from this product. Accordingly, we raise our EPS estimate by 28.9% and 28% to Rs70.5 and Rs76.1 for FY16E and FY17E, respectively. We also raise PE multiple from 20x to 22x to factor robust ANDA pipeline, increased capacity post commissioning of Dahej facility, product diversification expected to be achieved in regulated markets through acquisition of Zyg Pharma and ongoing revival of Elder portfolio. We raise our price target from Rs1,190 to Rs1,599 based on FY17E earnings. With 18.9% upside from current levels, we upgrade TRP from HOLD to BUY. At CMP of Rs1,345, the stock is trading at 19.1x FY16E EPS of Rs70.5 and 17.7x FY17E EPS of Rs76.1.

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