Torrent Pharmaceuticals Ltd.
ISIN: INE685A01028 • Market Cap: ₹1.91 Lakh Cr
The 5-Pillar Quality Audit for Torrent Pharmaceuticals Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (33.0%), Return on Capital Employed (9.5%), and equity compounding (25.8%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 1.76 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (13.6%) and 3Y PAT CAGR (9.2%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 87.43 vs PEG of 4.22 and Dividend Yield of 0.8%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 68.3%, backed by 25.3% institutional ownership.
Key Fundamental Strengths
Robust Equity Compounding (ROE: 25.8%)
Shareholder equity compounds at a healthy 25.8%, exceeding average Indian equity benchmarks.
Deep Institutional Sponsorship (25.3%)
Mutual funds, domestic DIIs, and foreign FIIs hold 25.3%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 9.5%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 1.76)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Priced for Perfection (P/E: 87.43)
A steep valuation multiple of 87.43 leaves little margin for safety against quarterly earnings misses.
Quantitative Strategy Eligibility
Checking TORNTPHARM against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 64/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Healthcare Sector Peer Comparison
Compare TORNTPHARM directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Torrent Pharmaceuticals Ltd. (TORNTPHARM)Current | 64/100 | ₹1.91 Lakh Cr | 87.43 | 9.5% | 1.76 | — |
| Sun Pharmaceutical Industries Ltd. (SUNPHARMA) | 77/100 | ₹4.55 Lakh Cr | 37.65 | 20.4% | 0.05 | View |
| Divi's Laboratories Ltd. (DIVISLAB) | 73/100 | ₹2.26 Lakh Cr | 77.37 | 19.4% | 0.00 | View |
| Apollo Hospitals Enterprise Ltd. (APOLLOHOSP) | 70/100 | ₹1.27 Lakh Cr | 60.55 | 19.1% | 0.62 | View |
| Cipla Ltd. (CIPLA) | 63/100 | ₹1.14 Lakh Cr | 33.94 | 16.1% | 0.01 | View |
| Zydus Lifesciences Ltd. (ZYDUSLIFE) | 79/100 | ₹1.10 Lakh Cr | 24.42 | 21.9% | 0.43 | View |
Frequently Asked Questions: Torrent Pharmaceuticals Ltd.
Q:What is the 5-Pillar Fundamental Score for Torrent Pharmaceuticals Ltd. (TORNTPHARM)?
Torrent Pharmaceuticals Ltd. has a RupeeTools Fundamental Score of 64/100, placing it in the 'Moderate / Average' category. Its pillar scores are: Profitability (83/100), Financial Health (48/100), Growth (62/100), Valuation (38/100), and Ownership Quality (82/100).
Q:Is TORNTPHARM fundamentally strong for long-term investment?
TORNTPHARM currently holds a moderate quality rating of 64/100. While it operates in the Healthcare sector, investors should monitor its debt health before initiating long-term positions.
Q:Does TORNTPHARM pass the Coffee Can Investing filter?
No. TORNTPHARM does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does TORNTPHARM compare against other Healthcare peers?
Within India's Healthcare sector, TORNTPHARM trades at a P/E of 87.43 and generates an ROCE of 9.5%. Compare its 5-Pillar score of 64/100 against top sector peers like Sun Pharmaceutical Industries Ltd. (77/100), Divi's Laboratories Ltd. (73/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.