Health Care: Torrent Pharmaceuticals, Abbott Laboratories, Cipla Ltd and more

• Incorporated in 1959, Torrent has a strong presence in domestic and semi-regulated markets and a growing presence in regulated markets.
• Revenues – India including CRAMs (53%), Brazil (8%), US (16%) and Germany (13%)
• Target Price and Valuation: We value Torrent at Rs 3235 i.e. 28x P/E on FY24E EPS of Rs 115.5

• Abbott Laboratories (ABT US) Q4 revenue and adjusted EPS beat consensus. Global COVID-19 testing-related sales were $2.3 billion, ahead of consensus of $1.3 billion.
• Management provided conservative guidance for 2022 COVID-19 testing revenue of $2.5 billion, which is expected to be updated on a quarterly basis.
• Abbott expects its medical devices business on a normal run rate in H2 2022. However, its diabetes care portfolio remained resilient and grew faster than the nearest competitor.

• Cipla is a global pharma company with over 1,500+ products in 65 therapeutic categories, with over 50 dosage forms
• Cipla supplies branded and generic medicines to over 170 countries globally.
• Target Price and Valuation: We value Cipla at Rs 1100 i.e. 24x P/E on FY24E EPS of Rs 44.6 + | 31 NPV for gRevlimid.

Federal Bank: Federal Bank (FB)’s Q3FY22 earnings were broadly in line with our estimates as declining credit costs (64bps) were partially offset by muted reflation in asset yields and lower other income. Asset quality continues to be impressive with negative net slippages, stable credit costs at 64bps, and a steady restructured pool (2.6%). While loan growth witnessed healthy traction (+12% YoY), asset yields continue to be soft, which is likely to reflate only gradually through exercising of pricing power and growth in unsecured retail (credit cards, PL, MFI, etc.).