This midcap pharma stock surged 8% despite reporting a net loss!

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by 5paisa Research Team Last Updated: Dec 12, 2022 - 01:00 am 27.1k Views
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The shares of Torrent Pharma have zoomed over 8% during Thursday’s trading session.  

Torrent Pharma reported a net loss of Rs 118 crore in Q4FY22 due to a one-time impairment provision and costs related to the discontinuation of liquid business in the US. Total revenue rose 10% YoY to Rs 2131 crore. The company said that the discontinued operation would save about Rs 135 crore per annum. As per the data, the company’s growth was 11% as against the 4% growth in Indian Pharmaceutical Market (IPM). This has cheered the investors.  

With today’s surge, the stock is crossed above its prior swing high of Rs 2837.95. Moreover, it has recorded a huge volume which is found to be greater than the 10-day, 30-day, and 50-day average volume. On the technical chart, the stock opened with a strong gap-up and continued to surge higher. It formed a bullish candle with an open=low scenario. From its recent swing low of Rs 2484.15, the stock is up 15%.  

As per the technical indicators, the stock’s strength has significantly improved. The 14-period daily RSI (63.10) has jumped into the bullish territory. The MACD line has moved higher after signalling a bullish crossover a few days back. Interestingly, the On Balance Volume (OBV) is at its peak and suggests strong strength from the volume’s perspective. The KST and TSI indicators maintain bullish view. The stock is above its 20-day short-term moving average by about 8% and moving average point upwards.  

The stock has a bullish price structure and is thus, expected to trade higher in the coming days. It has the potential to test the level of Rs 2915 level of 200-DMA, and Rs 3000 level in the short to medium term. As per the technical chart, the downside risk seems to be limited and the focus must be on upside. Traders have a good trading opportunity at their hand and can expect good gains from this stock.   

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