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The numbers tell that Torrent Pharmaceuticals's growth is outstanding

16-05-2014 • About Torrent Pharmaceuticals ($TORNTPHARM) • By InTwits

Torrent Pharmaceuticals is an attractive growth stock in Pharmaceuticals industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Torrent Pharmaceuticals showed growth in the last financial year. Torrent Pharmaceuticals's revenue surged on 32.2% in FY2014. Together with revenue growth Torrent Pharmaceuticals also managed to keep EBITDA growth. EBITDA grew 37.0% for the same period.

If we look for the longer period the company showed fast revenue growth of 24.0% from FY2011 to FY2014 annually. EBITDA surged on 35.1% from FY2011 to FY2014 annually.

Torrent Pharmaceuticals ($TORNTPHARM) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue57,94821,14725,94430,53540,363
Revenue growth, %-63.5%22.7%17.7%32.2%
SG&A, %
EBITDA4,1673,8785,2326,9729,553
EBITDA growth, %-6.9%34.9%33.3%37.0%
EBITDA margin, %7.19%18.3%20.2%22.8%23.7%
Net Income2,3122,7022,8404,3286,639
Net Income margin, % 3.99%12.8%10.9%14.2%16.4%
 
CAPEX1,5012,6501,7032,9294,001
CAPEX/Revenue, %2.59%12.5%6.56%9.59%9.91%
Debt5,2243,9265,9037,17711,359
Cash3434,7831,9066,2707,694
Net Debt/EBITDA1.2x-0.2x0.8x0.1x0.4x
 
ROIC, %26.5%22.3%26.4%30.5%33.2%
ROE, %31.2%29.2%25.6%33.1%39.9%

Profitability and return on investment


Margin expansion supported EBITDA growth. The company's EBITDA margin increased slightly on 0.900 pp from 22.8% to 23.7% in FY2014. If we look for the longer period the company showed fast EBITDA margin growth of 5.40 pp from 18.3% in FY2011 to 23.7% in FY2014.

We call Torrent Pharmaceuticals an attractive growth stock as together with the growth it delivers high ROIC at 33.2%. During the last three years it surged - it was 22.3% in FY2011. It's average ROIC for the last three years was 30.0%.

Torrent Pharmaceuticals showed fast Net Income margin growth of 2.20 pp from 14.2% to 16.4% in FY2014. In the longer period the company's Net Income margin surged on 3.60 pp from 12.8% in FY2011 to 16.4% in FY2014.

Torrent Pharmaceuticals operates at ROE of 39.9%. Average ROE for the last three years was 32.9%.

Capital expenditures (CAPEX)


To fuel this fast growth Torrent Pharmaceuticals had to invest in CAPEX.In FY2014 Torrent Pharmaceuticals had CAPEX/Revenue of 9.91%. Torrent Pharmaceuticals's CAPEX/Revenue dropped on 2.62 pp from 12.5% in FY2011 to 9.91% in FY2014. It's average CAPEX/Revenue for the last three years was 8.69%.

Leverage (Debt)


Having such a fast growth profile the company keeps low debt level at 0.4x Net Debt/EBITDA. In the longer period Torrent Pharmaceuticals showed fast leverage growth of 0.60x from -0.22x in FY2011 to 0.38x in FY2014.

Peers in Pharmaceuticals


Below you can find Torrent Pharmaceuticals benchmarking vs. other companies in Pharmaceuticals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Granules India ($GRANULES)-68.4%37.6%16.9%43.4%
Alembic Pharmaceuticals ($APLLTD)-52.0%22.0%3.7%22.6%
Glenmark Pharmaceuticals ($GLENMARK)-64.0%36.3%24.7%19.8%
Rpg Life Sciences ($RPGLIFE)-31.7%3.2%14.9%6.3%
Sanjivani Paranteral ($SANJIVIN)1.2%5.8%
 
Median (6 companies)-52.0%22.0%9.3%13.0%
Torrent Pharmaceuticals ($TORNTPHARM)-63.5%22.7%17.7%32.2%


Top companies by Gross margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Omega Laboratories ($OMEGALAB)0.0%0.0%0.0%
 
Median (1 company)59.2%0.0%0.0%0.0%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Alembic Pharmaceuticals ($APLLTD)13.4%15.4%16.4%19.2%
Glenmark Pharmaceuticals ($GLENMARK)8.2%20.1%17.8%20.9%18.3%
Neuland Laboratories ($NEULANDLAB)5.3%12.0%11.6%13.4%15.9%
Granules India ($GRANULES)4.1%13.7%13.5%12.8%14.5%
Sanjivani Paranteral ($SANJIVIN)8.8%8.3%7.5%
 
Median (6 companies)8.2%13.7%12.6%13.1%15.2%
Torrent Pharmaceuticals ($TORNTPHARM)7.2%18.3%20.2%22.8%23.7%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Granules India ($GRANULES)0.9%5.3%8.8%15.2%24.3%
Glenmark Pharmaceuticals ($GLENMARK)4.8%13.6%7.1%9.4%6.3%
Rpg Life Sciences ($RPGLIFE)6.0%4.5%5.7%5.8%
Alembic Pharmaceuticals ($APLLTD)5.2%4.2%5.7%4.4%
Neuland Laboratories ($NEULANDLAB)4.2%2.1%1.2%3.1%2.5%
 
Median (5 companies)4.4%5.3%5.1%5.7%5.8%
Torrent Pharmaceuticals ($TORNTPHARM)2.6%12.5%6.6%9.6%9.9%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Alembic Pharmaceuticals ($APLLTD)27.5%29.1%41.5%
Granules India ($GRANULES)12.8%15.8%14.2%18.4%
Neuland Laboratories ($NEULANDLAB)5.3%10.4%12.3%15.3%18.2%
Glenmark Pharmaceuticals ($GLENMARK)13.5%11.7%14.4%17.7%13.8%
Rpg Life Sciences ($RPGLIFE)19.1%18.3%6.1%4.5%0.8%
 
Median (9 companies)10.7%11.7%13.2%13.6%13.8%
Torrent Pharmaceuticals ($TORNTPHARM)26.5%22.3%26.4%30.5%33.2%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Granules India ($GRANULES)2.3x2.0x2.2x2.4x2.7x
Neuland Laboratories ($NEULANDLAB)7.9x4.9x4.2x3.5x2.6x
Glenmark Pharmaceuticals ($GLENMARK)2.7x3.2x2.7x2.1x2.2x
Rpg Life Sciences ($RPGLIFE)1.5x1.6x2.8x3.6x1.2x
Alembic Pharmaceuticals ($APLLTD)2.0x1.5x0.7x0.2x
 
Median (7 companies)2.7x2.6x2.8x2.4x1.2x
Torrent Pharmaceuticals ($TORNTPHARM)1.2x-0.2x0.8x0.1x0.4x