Torrent Pharmaceuticals share price added over 2 percent intraday on July 28 after the company declared its June quarter results.

The pharma company on July 27 reported a 2.8 percent year-on-year (YoY) rise in Q1FY22 net profit at Rs 330 crore, helped by India formulation, despite steep fall in US revenues.

The Ahmedabad-based drug maker reported Rs 321 crore net profit in the corresponding period of previous year. Total revenues rose 4 percent YoY to Rs 2,134 crore in Q1FY19, compared to previous year's Rs 2,056 crore. The earnings before interest, tax, depreciation and ammortisation (EBITDA) margins rose 200 basis points YoY to 34 percent in Q1FY22.

India revenues that constitutes more than half of Torrent Pharma revenues grew at 18 percent YoY to Rs 1,093 crore in Q1FY22, while US revenues dropped 29 percent to Rs 266 crore.

The company attributed US sales drop to price erosion of its base business and lack of new approvals due to pending inspection of facilities. As on June 30, 2021, 54 abbreviated new drug applications (ANDAs) were pending for approval with USFDA and seven tentative approvals were received, including one tentative approval received during the quarter.

The stock was trading at Rs 3,087.45, up Rs 83.70, or 2.79 percent. It has touched an intraday high of Rs 3,105.85 and an intraday low of Rs 2,890.

The scrip was trading with volumes of 38,616 shares, compared to its five day average of 7,131 shares, an increase of 441.54 percent.

According to global research firm CLSA the company posted a fifth quarter of margin beat with strong India positioning and improving outlook for exports. Q1 EBITDA of 7 percent was ahead of estimates, driven by positive surprise on margin, it said, according to a report on CNBC-TV18.

"India grew a healthy 18 percent YoY while an improving Brazil offset by weak US and EU sales. Improving outlook for Brazil, EU and steady growth in India are the key earnings drivers," it said.

"Tweak FY22-24 EPS estimates to 6-7 percent to bake in higher tax rate guidance and maintyain buy rating with target at Rs 3,650 per share.

JP Morgan on the other hand has maintained a neutral rating with target at Rs 2,750 per share. The key surprise in the quarter was SG&A cost being lower than Q1FY21. MR restructuring and lower SG&A spend indicate limited lever for margins. India growth momentum is crucial for the stock given its premium valuation, it added.

Jefferies has an underperform call on the stock with target at Rs 2,655 per share. The company reported a miss in Q1 with revenue/EBITDA/PAT coming in lower by 8%/6%/14% respectively.

"Expect US revenue to remain flat until facilities are cleared. FY22 will create a high base for India. We cut our FY23 growth rates marginally and EPS decline of FY22/FY23 by 8%/10% respectively on higher tax rates," it said.

Credit Suisse has an underperform call on Torrent Pharma but has raised target to Rs 2,475 from Rs 2,280 per share. US/Germany was weak and trend may sustain in FY22. Brazil growth should be good in FY22 (11-13 percent).

"We alter FY22/FY23 EPS by 3%/-7% to factor in higher margin in FY22 and higher FY23 tax rate," the research firm added.