Torrent Pharma’s (TRP) Q4FY25 adjusted EBITDA was broadly in line with our estimates. Our FY26/ FY27E EBITDA stands reduced marginally by 1-3%. TRP reported Rs 80bn (75% of total sales) worth of highly profitable branded formulation sales spread across India, Brazil and RoW markets. Curatio acquisition has been scaling up well with sharp margin improvement since acquisition. We expect 15% EBITDA CAGR and 27% PAT CAGR over FY25-27E with healthy RoE of +30%. At CMP, stock is trading at 22x EV/EBITDA/35x P/E on FY27E. We maintain our Accumulate with TP of Rs3,670/share, valuing at 25x EV/EBITDA on FY27E. TRP continues to explore inorganic opportunities which will be key for stock performance.
- Growth led by domestic revenues: Revenues grew by 8% YoY to Rs 29.6bn, in line with our estimates. Domestic business grew to 12% YoY. US sales improved 9% QoQ to $35mn. Brazil market was down 6% YoY due to weak currency. We estimated 8% decline. Germany delivered marginal growth of 2%. RoW including CRAMS growth was up 5% YoY. Resumption of insulin business further got delayed.
- Adjusted EBITDA in line, Rs170mn one off in COGS: TRP reported EBITDA of Rs 9.64bn (up 9% YoY). There was Rs170mn one time inventory adjustment towards one in-licensed product. Adjusted for this EBITDA growth was 11% YoY. Adjusted OPM remained came in at 33.2% up 100bps YoY; and 70 bps QoQ. Other income included forex loss. Other expenses remained flat YoY. Tax rate came in lower at 24%. PAT stood at Rs 5.2bn; up 16% YoY; we estimated Rs 5.4bn.
- Key concall takeaways: India: Domestic growth was aided by 7.4% price, 4% volume and 2.3% new product launches. The chronic division achieved a 14% growth, driven by outperformance in the Cardiac, diabetic and CNS portfolio. Field force increased to 6400 reps (+200), expected to rise 6800-6900reps by FY26E. Curatio brands continue to perform well. Revenue growth accelerated leading to 18-19% increase YoY. It enjoys sizeable portion of the India business. Curatio MR count at 600-650 reps. Brazil: Channel destocking and currency depreciation impacted growth YoY. Partnered with dossier holder, awaiting approval by end of CY25 (~200mn opportunity). Expanded team for CNS portfolio. (2 CNS and 1 Cardiology team). Currently has 330 reps. Productivity at BRL 220K/month. Guided for 10-12% growth in CC terms. Germany: Continue to win tenders. Mgmt expects single digit growth from the portfolio. Contribution to improve from Q3FY26E. CRAMS: Generated Rs 750mn in Q4FY25. Expected to maintain similar run rate; some catch-up in Q1/Q2FY26E due to destocking by partner (Novo Nordisk). US markets: Delivered 10% YoY growth in CC terms largely aided by volume increase in existing contracts. Portfolio remains largely in oral solids but actively shifting toward complex generics to improve margins and growth. Guided for annual run rate of $130-140mn. Other: Semaglutide (GLP-1’s): Ready for first wave launch both injectable (partnered) as well as oral (in house). One time impact of Rs 170mn on gross margins due to inventory revaluation for an in-licensed product going off patent. R&D cost to increase by 20% includes complex products for India, Brazil and US markets. Net debt reduction of Rs6.2bn to Rs23bn was moderate in FY25 given lower EBITDA to OCF conversion. The company’s focus remains on debt repayment, aims to be net cash by FY27E.
Zydus Lifesciences (ZYDUSLIF) Q4 EBITDA including other operating income beat our estimates by 8%. We believe gRevlimid + gMirabegron contributes +45% to total FY25E EPS which will see erosion from FY27. Though, company is working on a robust pipeline of complex products, including injectables, 505(b)2, transdermals, NCE, biosimilars and vaccines, they are expected to materialize over the next 2–3 years. We expect US sales to decline in FY27 given sales erosion in some of key products and thereby expect 7% EPS CAGR decline over FY25-27E. Mgmt have guided for 2-3 high value launches over FY27/28, timely launch will be key to sustaining momentum in US sales. Our FY26/27E EPS broadly remains unchanged. We maintain our ‘Accumulate’ rating with TP of Rs970, valuing at 24x FY27E EPS.
- US revenues aided revenue growth YoY: ZYDUSLIF showed revenue growth of 18% YoY to Rs65.2bn, against our estimate Rs 64bn. Domestic formulation delivered growth of 11% YoY. Consumer business grew by 17% YoY. US sales came in at $363mn vs $285mn in Q3FY25. Mgmt cited QoQ improvement was aided by new launches and products like gMirabegron. EM markets were up by 12% YoY to Rs 5.5bn. API revenues came in lower YoY; down 10%.
- Improved GMs and other operating income supported: EBITDA, including other operating income, came in at Rs21.7bn; up 33% YoY. OPM stood at 33%, up 380bps QoQ. GMs improved 400bps QoQ to 73% due to change in product mix in US markets. R&D expenses came in at Rs4.8bn (7.6% of revenue), up 49% YoY. Other operating income came in higher at Rs 2.4bn. There was forex loss of Rs 394mn. There was one time impairment charges to the tune of Rs 2.1bn. EPS adjusted for forex came in at Rs 13.7/share.
- Key concall takeaways: India formulation: Key therapies such as Cardiology, CNS, Gastro-Intestinal and Respiratory outperformed industry growth. Chronic portfolio share has increased consistently and now at 43%. In consumer health segment both the personal care segment and food & nutrition segment performed well aided by higher volumes. US markets: The performance was largely driven by base portfolio, gMyrbetriq and recent launches. During Q4FY25 it launched 5 new products. Filed 3 ANDAs and received approval for 6 new products. gRevlimid: Reported negligible growth in revenues on YoY basis in Q4FY25 as company was under negotiations with respect to quantities and pricing which has pushed sales to Q1. In FY26 gRevlimid sales are expected to spread across 2–3 quarters. Mgmt cited contribution from gRevlimid has peaked in FY25. On gMyrbetriq it mentioned that litigation is ongoing and supply continues with lesser chances for it to get interrupted. Sitagliptin (Zituvio franchise): Doing far better than initial expectations across private and tender market. Will be a meaningful contributor in FY26. GLP-1: Novel formulation is ready. Planned for day-1 launch. Exploring licensing opportunities for global markets. Vaccines: Initiated development of world’s first Shingolis + Typhoid combination vaccine with Gates Foundation support. Phase 2 trial for bivalent Typhoid Conjugate Vaccine approved. Growing participation in public tenders (India, UNICEF, PAHO). Expect FY26 vaccine contribution to be meaningful. Tariff’s: Mgmt is evaluating opportunities to manufacture in US and Europe via partnerships or third-party manufacturing particularly for specialty products. Remains uncertain about the impact on generic pricing. Other: Expect Biologics to scale up from FY26E. R&D spend to rise in FY26 (~8% of revenues). Major focus areas includes NCE’s, Vaccines, MedTech, peptides and biosimilars. Planned 14–15 critical launches in FY27E many in complex generics and injectables. FY26E EBITDA margin guidance: +26% factoring gRevlimid erosion, R&D increase, gAsacol loss. Impaired 2 assets in Q4FY25 Roflumilast (Teva-acquired product) due to litigation and goodwill from the Brazil business due to structural market challenges.
Hindalco Industries (HNDL) Q4FY25 delivered strong cons operating performance on strong India aluminium business and Novelis. Strong LME, higher alumina prices and lower operating cost aided Indian upstream aluminium business while superior product mix benefitted downstream as volumes were stable. Mgmt. guided flattish costs for Q1 and expect downstream EBITDA/t (targeting USD250-300/t) to witness improvement as most of the projects would see ramp up in FY26. Bandha coal mine has already received mining lease and mgmt. expects to receive full benefits from FY28E. Securing coal mine would aid HNDL to plan further upstream capacity additions at Mahan complex. Coal supplies from captive Chakla mine to start from Dec’26 (box cut by Apr’26) and full benefits are expected from FY28E (seems delay of two quarters again). Novelis Q4 was inline on better shipments, higher Can pricing and timing element benefitting European ops. Adverse impact of ~USD40/t is expected due to inter-region movement, as Novelis imports Can sheet from S. Korea/ Brazil (25% duty as per section 232 Vs 10% earlier which used to get exempted). Also, Canada supports US for Auto sheets. We expect adverse impact to remain till ramp up of Bay Minnette by early FY29, unless US govt gives exemptions over the period. We believe Novelis’ 1HFY26 to be impacted due to the tariffs and weak macro, however as US negotiates deals with rest of the world, both demand and margin situation should improve. Over the long term, as global geopolitical situation improves, uptick in demand environment should aid LME pricing supporting India EBITDA. We maintain our Novelis EBITDA/t assumption for FY26/27E at USD440/480 till there is some visibility on benefits of efficient scrap sourcing by Novelis.
We tweak our FY26/27E EBITDA estimates by -2%/2% respectively as we factor in lower AL prices of USD2,479/USD2,504 for FY26E/27E. At CMP, the stock is trading at EV of 6x/5.3x FY26/27E EBITDA. As uncertainty over Novelis EBITDA/t continues and stock has also run up ~10% in past one month, we downgrade it to ‘Accumulate’ from ‘Buy’ rating earlier with revised TP of Rs724 (earlier Rs736), valuing Novelis at 6.5x & standalone ops at 5.5x EV of Mar’27E EBITDA.
We cut our FY26E/FY27E EPS estimates by 12%/7% as we re-align our top-line assumptions amid signs of growth fatigue in the core stationary business. DOMS reported an in-line performance with revenues of Rs5,087mn (PLe Rs5,067mn) and EBITDA margin of 17.3% (PLe 17.0%). However, growth in the core stationary business was at multi-quarter lows of 14%. Though we foresee near term growth challenges, the long-term story remains intact as the new development plan on 44-acres land parcel at Umbergaon is on track and the first building is expected to be ready by 3QFY26E. Further, phased expansion in capacities for pens, pencils, mathematical boxes, and paper stationary products will drive growth in the interim; further aided by consolidation of hygiene business. We expect sales/PAT CAGR of 24% over FY25E-FY27E and retain BUY on the stock with a TP of Rs3,087 (60x FY27E EPS; no change in target multiple).
Revenue increased 26.0% YoY: Top line increased 26.0% YoY to Rs5,087mn (PLe Rs5,067mn). Stationery revenue increased 14.1% YoY to Rs4,607mn, contributing 90.6% to the overall revenue, with an EBITDA margin of 19.3%. Hygiene revenue stood at Rs481mn, contributing 9.4% to sales, with an EBITDA margin of 8.2%.
EBITDA/PAT up 16.2%/7.2% YoY: EBITDA increased 16.2% YoY to Rs883mn (PLe Rs864mn) with a margin of 17.3% (PLe: 17.0%). PAT after MI increased by 7.2% YoY to Rs484mn (PLe Rs496mn) with a margin of 9.5% (PLe: 9.8%) as compared to a margin of 11.2% in 4QFY24.
Con-call highlights: 1) Capex (including capital advances) of Rs2.1bn was incurred in FY25. ~Rs1.1bn/Rs1.0bn/Rs0.1bn was spent towards expansion of 44-acre plant/core stationery business enhancement/investments in Uniclan respectively. 2) Capex of ~Rs2.3bn-2.5bn has been earmarked for FY26E and FY27E each, which will be funded through internal accruals and unutilized IPO proceeds (of over Rs1.7bn). 3) Possession of the 1st building at the 44-acre expansion project is expected by 3QFY26E, while commercial production will commence from 4QFY26E. 4) Capacity at Pioneer Stationery was increased by ~20% in Oct’24, and a 4th fully automatic line will be added to further enhance capacity. 5) Acquisition of Super Treads will boost the capacity of paper stationery segment by an additional ~30%. It has a capacity of processing 300MT of paper with monthly sales potential of ~Rs25-30mn. 6) Capacity of wet wipes stands at 17mn packs per annum. 7) There are plans to increase production capacity of pencils from 5.5mn to 8mn pieces per day. 8) Uniclan has a monthly sales run rate of Rs 150–170mn, with steady state EBITDA margin potential of ~8–9%. 9) Working capital stood at ~60 days, impacted by trade receivables from the Uniclan acquisition. It is expected to normalise to ~55 days. 10) PAT was impacted by Rs23mn of amortization expense in 4QFY25 related to Uniclan’s brand value post-acquisition. The recurring annual run-rate is expected to be at ~Rs 45mn. 11) EBITDA/PAT margin is expected to be at 16.5%-17.5%/10% respectively in FY26E.
We revise our FY26/27E EPS estimate by +2.9%/+3.7% factoring in operational efficiencies and increasing indigenous component, however, downgrade our rating from ‘Buy’ to ‘Hold’ given the recent rally in the stock despite strong outlook. Bharat Electronics (BEL) reported robust quarterly performance with revenue growth of 6.9% YoY and EBITDA margins expanding by 385bps YoY to 30.6%. The company has guided for an order intake surpassing Rs270bn in FY26 supported by strong traction from both domestic and export markets, as well as repeat orders from key defence customers. Furthermore, recent geopolitical events along with India’s FTA with EU is anticipated to open up new avenues for growth. However, certain delays in regulatory processes may result in the big order of QRSAM (worth ~Rs300bn) being awarded by Q4FY26/Q1FY27. BEL is poised to benefit from the government’s Emergency Procurement drive, with management expecting clarity soon on its participation across 8–10 key defence items, reinforcing near-term growth visibility. Meanwhile, it aims to grow non-defence revenue mix to 10% by FY26 aided by orders in Kavach, homeland security, data centre, fibre optics to strengthens its long-term growth. We roll forward to Mar’27E with a revised TP of Rs374 (Rs340 earlier) valuing the stock at a PE of 40x Mar’27E (40x Sep’26E earlier). Downgrade to ‘Hold’
Long term View: We remain positive on long-term growth story of BEL given 1) strong order backlog & strong multi-year order pipeline 2) diversification in newer business verticals like Kavach, fiber optics, anti-drone tech, data centers etc., to aid non-defence growth and 3) govt’s focus on product indigenization.
Lower other expenses drive the profitability growth : Standalone revenue rose 6.9% YoY to Rs91.2bn (PLe: Rs90.3bn). EBITDA grew 22.3% YoY to Rs27.9bn (PLe: Rs21.6bn). EBITDA margin increased by 385bps YoY to 30.6% (PLe: 23.9%) led by the lower other expenses (-534bps YoY % of sales). PBT grew 19.4% YoY to Rs28.5bn (PLe: Rs22.5bn).PAT rose 18.0% YoY to Rs21.0bn (PLe: Rs16.8bn) driven by the strong operating performance despite lower other income (-11.9% YoY to Rs1.9bn).
Order book stands strong at ~Rs711bn (3.2x TTM sales): Order intake for the quarter stood at ~Rs184bn, which missed the management guidance of Rs250bn amid slippage of orders in April due to finalization delays. Order intake guidance for FY26 is ~ Rs270bn and QARSM orders worth of ~Rs300bn expected to be deferred to Q1FY27. Order Book for FY25 stood at ~Rs 711bn.
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