Torrent Pharma among 3 pharma stocks to buy as analysts sees strong gain in 2023

Torrent Pharma among 3 pharma stocks to buy as analysts sees strong gain in 2023


Sun Pharmaceutical Industries, Cipla, J.B. Chemicals & Pharma, and Torrent Pharmaceuticals have all received buy ratings from the brokerage company Prabhudas Lilladher, which is optimistic on the pharmaceutical sector. For Sun Pharma, the brokerage sees a gain up to a target price of 1175, for Cipla, the brokerage has set a target price of 1300, for JBCP, the brokerage has fixed a target price of Rs. 2350 and for Torrent Pharma, the brokerage sees upside up to a target price of 1850.

The research analysts of the broking firm Prabhudas Lilladher said in a research note that “We expect pharmaceuticals companies under our coverage to report moderate EBIDTA growth of 6.5% YoY (flat QoQ), mainly aided by steady domestic growth, gRevlimid sales and strong flu season in US. Benefits of INR depreciation vs USD (+10% YoY and 3% QoQ) will also aid profitability. On flip side, cost is likely to remain elevated and volatile. Price erosion of base business in US, likely to continue. Our Top Picks remain SUNP, CIPLA, JBCP and TRP.”

They have further claimed that “BSE Healthcare Index underperformed Sensex by 7.3% in Oct-Dec22 quarter, given weak Q2 earnings. While sector may continue to marginally underperform in the near-term, our sectoral outlook remains positive led by tailwinds in US generics, healthy domestic formulations segment and normalization in input cost. Henceforth we expect profitability to improve with steady domestic business, improved niche launches in US market and continued cost optimization. We prefer companies with steady domestic franchises and strong US visibility. Our top picks remain SUNP, CIPLA, JBCP and TRP.”

For the shares of Sun Pharmaceutical Industries the analysts have said that “Over last few years SUNP dependency on US generics has reduced and company’s growth is more functional on US specialty, RoW and domestic pharma business, that continues to show strong growth visibility. Maintain ‘BUY’ rating on the stock at TP 1175.”

For the shares of Cipla, the analysts have recommended that “With steady growth in domestic market and visibility in increased revenue traction from continuous ramp-up of niche launches in US, we remain positive on the stock. Retain ‘BUY’ rating at TP of 1300.”

For the shares of J.B. Chemicals & Pharma, the research analysts of the broking firm Prabhudas Lilladher said in a note that “Company’s strong positioning in domestic markets and focus on scaling emerging opportunities in export segment, places it in an advantageous position to ride on near term growth prospects. Maintain ‘BUY’ rating at TP of Rs. 2350.”

For the shares of Torrent Pharmaceuticals, the research analysts said “Strong presence in highly profitable branded business in domestic as well as Brazil and ROW market and recent completion of Curatio acquisition gives us comfort on the stock. Recommend ‘BUY’ rating at TP 1850.”

Considering the hospital sector, the brokerage has said that “In Q3, Hospital companies under our coverage are expected to register flat YoY growth (down 4% QoQ) in post IND AS EBITDA (6% YoY EBIDTA growth ex Rs1.75bn loss in Apollo 24×7). As Q3 being a seasonally weak quarter, we expect occupancy across our coverage universe to remain soft QoQ. We anticipate ARPOB to continue to remain healthy, aided by improving case and payor mix. Overall, we see EBITDA decline of 14%, 5% and 3% YoY for APHS, ASTERDM and FORH whereas NARH, HCG, KIMS and MAX may see 26%, 26%, 14% and 8% YoY growth respectively. We remain structurally positive in the hospitals space and expect momentum to continue in FY24 with 1) improvement in occupancy, 2) better case mix and 3) sustainability of current ARPOB.”

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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