Shares of Torrent Pharmaceuticals rose over 2 percent in early trade on August 8 to hit a 52-week high of Rs 2,094.55, a day after the company reported healthy earnings for the April-June quarter. Following the earnings announcement, brokerages also rolled out a strong growth outlook for the drug maker, which further lifted sentiment.

The company recorded a nearly 7 percent on-year rise in net profit for the quarter while revenue grew 10.4 percent during the same period. Industry-beating growth of 14.5 percent in domestic formulations coupled with an increase in sales in Brazil and Germany helped the company offset weak revenues from its US business.

Revenues for the drugmaker’s US business fell 2 percent on year due to price erosion on the base portfolio and lack of new launches due to pending inspection of facilities.

Regardless, brokerages are pinning hopes on Torrent’s strong domestic presence to drive numbers in the quarters to come as they painted a robust growth trajectory for the drugmaker.

At 09.30 am, shares of Torrent Pharmaceuticals were trading at Rs 2,063.65 on the NSE, up about a percent from the previous close.

Follow our live blog for all the market action

Foreign brokerage Jefferies also backs that view and believes Torrent’s presence in the domestic branded market and a recovery in Germany will remain key growth drivers for the drugmaker. The firm also sees a steady EBITDA margin expansion of 600-100 basis points per annum as another growth lever for the company. Jefferies has a ‘hold’ rating for the stock, with a price target of Rs 1,950.

Nuvama Institutional Equities is equally enthusiastic over Torrent Pharma’s branded-franchise-led growth potential as it expects the drugmaker’s market-beating volume growth to lead the prescription medicine segment. Nuvama also sees huge growth potential in Torrent’s over-the-counter portfolio, given its strong product mix.

Consequently, the firm raised its multiple to 35 times Q1 FY26 expected earnings for Torrent Pharma on the back of domestic growth and margin headroom. The firm also raised its target price for the stock to Rs 2,410 while retaining a ‘buy’ call on the stock.

Motilal Oswal Financial Services also raised its earnings-per-stock estimates for FY24/FY25 by 4 percent each to factor in a reduced intensity of price erosion in US generics, product launches, market share gains in Latin America, and improving growth prospects in Germany.

The brokerage also feels Torrent is on track to outperform in the domestic formulations segment through price hikes, increasing reach and enhancing brand value by building a consumer healthcare franchise. Moreover, a faster pace of launches in Brazil should help Torrent sustain the growth momentum, the firm believes.

However, MOFSL still chose to retain its ‘neutral’ stance on the stock, with a price target of Rs 1,960 as it believes the rich valuations at the current levels factor in the earnings upside over the next 2-3 years.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.