Torrent Pharmaceuticals Ltd is one of the leading Indian Pharmaceutical Company engaged in research, development, manufacturing and marketing of generic pharmaceutical formulations. It is the flagship company of Torrent Group which also has presence in power and city gas distribution businesses. • Company delivered a slightly muted Q3FY25, owing to nil insulin sales, forex impact and a tad lower growth across markets. • TRP maintained its guidance of EBITDA margin improvement of 50-100 bps every year. • Aided by debt retirement, we bake in 24% adjusted EPS CAGR over FY24-27E. • At ~44x FY26E EPS, we believe M&A optionality and strong earnings momentum are well captured. • We await a better entry point and retain our REDUCE rating. Q3FY25 Earnings update: Positives: • India growth was healthy at 12% yoy, largely driven by price hikes and new launches. • Interest expenses will keep coming down every quarter; TRP expects to turn net cash positive in two years. Negatives: • Q3FY25 sales missed our estimates by 7%; weakness in US/Germany. • TRP reported an EBITDA of Rs914 cr, missed our estimate by 8%. • PAT at Rs503 cr missed our estimates by 4%.

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