01 July 2025 Company update

Torrent Pharma
J.B. Chemicals acquisition a strategic fit ADD
Torrent Pharma has entered into definitive agreements to acquire a controlling
CMP (as on 30 Jun 2025) INR 3410
stake in J. B. Chemicals and Pharma (JB Pharma) from KKR at an equity
valuation of INR 256.89 bn, followed by a merger of the two entities. The Target Price INR 3680
acquisition will be executed in two phases: (1) acquisition of ~46.39% equity NIFTY 25,517
stake through an SPA^ at a consideration of INR 119.17 bn (INR 1,600 per share;
~11% discount) and 2.8% from certain employees of JB Pharma, followed by an KEY
OLD NEW
open offer to acquire up to 26% of JB Pharma shares from public shareholders CHANGES

at a price of INR 1,639/share; and (2) merger between Torrent and JB Pharma Rating ADD ADD

through a scheme of arrangement, whereby every shareholder holding 100 Price Target INR 3650 INR 3680
shares in JB Pharma shall receive 51 shares of Torrent. Based on the current FY26E FY27E
structure of the deal, the deal valuations are 6.6x EV/Sales, 24.8x EV/EBITDA, EPS %
(0.3) (0.3)
and 38.9x EV/PAT for FY25. The controlling stake acquisition is expected to
complete in 5-6 months (CCI approval by Q4FY26), and implementation of the
KEY STOCK DATA
amalgamation scheme should take another 12 months. This acquisition will be
win-win for both the companies. Torrent Pharma has an excellent track record Bloomberg code TRP IN
of acquisition followed by execution (Elder, Unichem, and Curatio). While the No. of Shares (mn) 338
near-term PAT could be a drag (~6%/12/2% in FY26E/ FY27E/ FY28E; assuming
MCap (INR bn) / ($ mn) 1,153/13,450
100% open offer execution) considering it will be a debt-funded acquisition, it
will be sales and EBITDA accretive (margins dilution for the combined 6m avg traded value (INR mn) 1,188
business). For the merger process, Torrent needs to issue ~17mn additional 52 Week high / low INR 3,591/2,758
shares for minority shareholders of J.B. Pharma (if open offer executes fully),
which will result in 5% equity dilution for Torrent Pharma shareholders. STOCK PERFORMANCE (%)
Torrent has reduced its net debt to ~INR 25 bn in FY25 from INR 46 bn in FY23.
3M 6M 12M
We will factor J. B. Pharma in our estimates on completion of the M&A process.
We have revised TP to INR 3,680 (39x Q1FY28E EPS). ADD stays. Absolute (%) 5.6 1.4 22.1

Strategic rationale for acquisition: (1) acquisition provides access to a fast- Relative (%) (2.4) (5.6) 16.3
growing India franchise, with leading brands in the chronic segment and entry
into areas like ophthalmology; (2) strengthens market share in the IPM for SHAREHOLDING PATTERN (%)
Torrent; (3) operational synergies across multiple business functions; (4) platform Dec-24 Mar-25
diversification with entry into the CDMO segment with long-term potential; and
Promoters 68.31 68.31
(5) consolidation in key international markets and greater ability to scale up.
FIs & Local MFs 7.17 7.02
JB Pharma will be a strategic fit for Torrent Pharma: JB Pharma’s India
formulations business has outperformed IPM by ~2x, with a CAGR of 18% over FPIs 16.17 16.31
FY20–25, which has led to market share improvement to 1.2% as of MAT Mar’25 Public & Others 8.35 8.36
(vs. 0.8% in MAT Mar’20). JB Pharma’s therapy is concentrated, with the top two
Pledged Shares - -
therapies contributing ~70% of its India sales. Its top brands like Cilacar, Rantac,
Cilacar-T, Metrogyl, Nicardia, and Sporlac saw strong performance over the past Source: BSE
few years. The merger will move Torrent’s rank from 8th to the 5th largest
company in India. The market share will increase to 4.6%. Moreover, JB Pharma’s
portfolio will help Torrent create a presence in key chronic molecules such as
Cilnidipine and combinations (Cilacar) and Ranitidine (Rantac). This merger will
also help Torrent create a presence in export markets (Africa, Russia, and the US)
as well as CMO (amongst largest manufacturer of Lozenges) business.
Financial Summary Mehul Sheth
YE March (INR bn) FY22 FY23 FY24 FY25 FY26E FY27E FY28E [email protected]
India sales (INR bn) 43 50 57 64 73 83 94 +91-22-6171-7349
Net Sales 85 96 107 115 131 147 164
EBITDA 24 28 34 37 43 50 56
APAT 11 13 16 20 25 31 35 Divyaxa Agnihotri
Diluted EPS (INR) 31.1 37.2 47.9 58.2 74.8 91.0 104.5
[email protected]
P/E (x) 109.7 91.8 71.2 58.6 45.6 37.5 32.6
EV / EBITDA (x) 48.9 42.3 35.2 31.7 26.9 23.2 20.4
+91-22-6171-7362
RoCE (%) 17 20 22 25 31 36 38
Source: Company, HSIE Research, ^Share Purchase Agreement

HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
Torrent Pharma: Company Update

Key takeaways from concall:

▪ Transaction to take 15-18 months: It expects (a) CCI and other regulatory
approvals in next 5-6 months without any major divestment of business or brands
due to minimum overlaps, which could lead to buyout of controlling stake of
~49.14% (46.39% from KKR and 2.8% from existing employees), (b) open offer
which could take one month from date of acquisition of stake, and (c)
implementation of scheme of amalgamation to complete in 12 months after open
offer (it will require 26% stakeholder approval of JB Pharma for an amalgamation
process). It will look to acquire a smaller stake if open offer doesn’t go through.
▪ Funding: The mode of deal financing has not yet been decided, but it is most likely
to be debt-funded, with the cost of borrowing expected to remain slightly below
8%. The company plans to repay this debt over the next 2–3 years. It expects net
debt to EBITDA to remain in a comfortable range of 2.0–2.8x by FY27, with a target
to bring it down to below 1x over the following couple of years.
▪ Revenue and cost synergies: The company expects to start seeing synergy benefits
from Q4FY26 which will accelerate over FY27/28; it expects the deal to be EPS
accretive from FY28 as starts to see revenue-led margin improvements. For the
merger to be EPS accretive, the company has assumed ~40% of the open offer to be
triggered; if 100% of open offer is triggered, it will be EPS accretive by the second
year of acquisition. On cost front, the company sees multiple levels of synergies
like procurement-related savings, better bargaining power through common
vendors, optimization through eliminating duplicities, combining manufacturing,
and R&D combination benefits.
▪ India business: It expects revenue synergies in India with overlap on cardiac
specialty coverage, access to opthal, nephro, and IVF segment, and visibility of
long runway of growth in J.B. Chemicals’ legacy brands (Cilacar, Metrogyl, and
Nicardia).
▪ Export business: The company is looking to leverage the strong presence of J.B.
Pharma in key export markets like Russia and S Africa. For the generics business,
it is expecting to leverage its own front-end network to scale the business.
▪ CDMO business: No particular synergies between two CDMO businesses, since
they are different manufacturing products (insulin for Torrent and Lozenges for
J.B. Pharma).
▪ Other highlights: The FY25 RoCE for Torrent was ~25%. The company expects
RoCE to be back at the same level in the next three years (in FY28/FY29). The
company does not have any particular risk mitigation clauses for at-risk products
for J.B. Pharma like Rantac. It has assumed 70-75% of deal value as intangible assets
which will get amortized over 15 years as per Torrent’s policy. The company is not
looking to rationalize the senior management team after the merger process.

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Torrent Pharma: Company update

Exhibit 1: Torrent Pharma performance

CAGR
INR mn FY20 FY21 FY22 FY23 FY24 FY25
FY20-25
Torrent Pharma
Revenue mix
India sales 35,170 37,390 42,860 49,840 56,660 63,930 13%
YoY growth 9% 6% 15% 16% 14% 13%
% of sales 45% 47% 51% 53% 54% 56%
Export formulations 38,018 36,409 35,856 39,980 43,642 43,813 3%
YoY growth 1% -4% -2% 12% 9% 0%
% of sales 49% 46% 43% 42% 41% 39%
CMO 4,612 5,064 5,472 4,817 5,321 5,427 3%
YoY growth 0% 10% 8% -12% 10% 2%
% of sales 6% 6% 6% 5% 5% 5%
Total sales 77,800 78,862 84,188 94,637 1,05,623 1,13,170 8%
YoY growth 4% 1% 7% 12% 12% 7%
Source: Company, HSIE Research

Exhibit 2: J.B. Chemical and Pharma performance

CAGR
INR mn FY20 FY21 FY22 FY23 FY24 FY25
FY20-25
JB Chemical and Pharma
Revenue mix
India sales 7,971 8,924 11,740 16,390 18,970 22,690 23%
YoY growth 18% 12% 32% 40% 16% 20%
% of sales 45% 44% 48% 50% 53% 58%
Export formulations 7,297 8,401 9,102 11,305 11,896 11,270 9%
YoY growth 3% 15% 8% 24% 5% -5%
% of sales 41% 41% 38% 35% 33% 29%
CMO 1,760 2,240 2,500 4,060 4,320 4,460 20%
YoY growth 4% 27% 12% 62% 6% 3%
% of sales 10% 11% 10% 12% 12% 11%
API 720 860 900 940 860 760 1%
YoY growth -17% 19% 5% 4% -9% -12%
% of sales 4% 4% 4% 3% 2% 2%
Total JB Pharma 17,747 20,425 24,242 32,695 36,046 39,180 17%
YoY growth 8% 15% 19% 35% 10% 9%
Source: Company, HSIE Research

Exhibit 3: Torrent + J.B. Pharma performance

J.B. Chem & Combined
Revenue mix FY25 Torrent Pharma % Impact
Pharma entity
India sales 63,930 22,690 86,620 35%
% of sales 56% 58% 56%
Export formulations 43,813 11,270 55,083 26%
% of sales 38% 29% 36%
CMO 5,427 4,460 9,887 82%
% of sales 5% 11% 6%
API - 760 760 NA
% of sales 0% 2% 0%
Total revenues 1,15,160 39,180 1,54,340 34%
EBITDA 37,780 10,318 48,098 27%
EBITDA margin 32.8% 26.3% 31.2% -164 bps
Source: Company, HSIE Research

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Torrent Pharma: Company update

Exhibit 4: Impact scenario assuming debt-funded acquisition, not building in major

synergy benefits
INR mn FY26E FY27E FY28E
Torrent Pharma 1,30,588 1,47,196 1,64,280
J B Chem 10,928 48,781 54,459
Total revenues 1,41,515 1,95,977 2,18,739
% impact 8% 33% 33%

EBITDA
Torrent Pharma 43,486 49,605 55,855
J B Chem 2,950 13,659 15,793
Total EBITDA 46,436 63,264 71,648
% impact 7% 28% 28%

EBITDA margin
Torrent Pharma 33.3% 33.7% 34.0%
J B Chem 27.0% 28.0% 29.0%
Total EBITDA 32.8% 32.3% 32.8%
Impact -49 bps -142 bps -124 bps

Debt raises for M&A 1,36,998 1,21,998 1,03,998

PBT 32,627 36,609 46,944

% impact -6% -12% -2%

PAT 23,818 27,090 34,738

% impact -6% -12% -2%
Source: Company, HSIE Research

Exhibit 5: Torrent has a strong track record of M&A execution

Source: Company, HSIE Research

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Torrent Pharma: Company update

Exhibit 6: Torrent Pharma: steady growth in key therapies

% of FY25
Torrent Ph. therapy YoY % FY20 FY21 FY22 FY23 FY24 FY25
sales
Cardiac 27% 7% 10% 1% 9% 7% 12%
Gastro Intestinal 18% 13% 9% 21% 16% 7% 11%
Neuro / CNS 15% 6% 13% 12% 18% 9% 9%
Vitamins/Minerals/Nutrients 10% 9% 15% 14% 17% 9% 3%
Anti Diabetic 9% 19% 14% 9% 15% 13% 16%
Pain / Analgesics 8% 7% 2% 14% 17% 8% 4%
Derma 6% 9% -1% 21% 19% 12% 2%
Anti-Infectives 2% -4% -17% 5% -8% 3% 2%
Gynaec. 2% 16% 8% 27% 31% -1% 14%
Antineoplast/Immunomodulator 1% 4% -33% 106% 81% 17% -32%
Torrent Ph. total 100% 8% 8% 11% 14% 8% 8%
Source: IQVIA, HSIE Research

Exhibit 7: J.B. Pharma: Strong growth cardiac

% of FY25
JB therapy YoY % FY20 FY21 FY22 FY23 FY24 FY25
sales
Cardiac 44% 24% 15% 24% 23% 14% 19%
Gastro Intestinal 25% 10% 11% 22% 21% 10% 5%
Ophthal / Otologicals 8% NA NA 10% 13% -3% 10%
Anti-Parasitic 8% 17% 32% 29% 30% 8% 8%
Gynaec. 4% 29% -9% 39% 33% 19% 9%
Derma 3% 23% 10% 34% 17% 7% 18%
Anti-Infectives 2% 2% -31% 15% -10% -1% 3%
Respiratory 1% 10% -31% 327% 72% 18% 0%
Vitamins/Minerals/Nutrients 1% 1% -17% 13% 3% 5% 14%
Pain / Analgesics 1% 4% -18% 18% -3% -10% 0%
JB total 100% 15% 23% 25% 21% 10% 12%
Source: IQVIA, HSIE Research

Exhibit 8: Torrent + J.B. Pharma: Cardiac and gastrin share to increase

Therapy mix % of sales in FY25 Torrent Pharma J.B. Pharma Torrent + JB
Cardiac 27% 44% 32%
Gastro Intestinal 18% 25% 20%
Neuro / Cns 15% 0% 11%
Vitamins/Minerals/Nutrients 10% 1% 8%
Anti Diabetic 9% 1% 7%
Pain / Analgesics 8% 1% 6%
Derma 6% 3% 5%
Anti-Infectives 2% 2% 2%
Gynaec. 2% 4% 3%
Antineoplast/Immunomodulator 1% 0% 0%
Other 1% 19% 6%
Total 100% 100% 100%
Source: IQVIA, HSIE Research

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Torrent Pharma: Company update

Exhibit 9: Torrent Pharma: market share

% of
Torrent Ph. therapy MS % FY25 FY19 FY20 FY21 FY22 FY23 FY24 FY25
sales
Cardiac 27% 8.8 8.5 8.2 7.4 7.5 7.3 7.3
Gastro Intestinal 18% 4.9 5.1 5.3 5.4 5.6 5.6 5.7
Neuro / Cns 15% 7.9 7.6 7.8 7.8 8.2 8.3 8.4
Vitamins/Minerals/Nutrients 10% 3.9 3.8 3.9 3.9 4.4 4.4 4.2
Anti Diabetic 9% 2.6 2.7 2.8 2.9 3.1 3.3 3.6
Pain / Analgesics 8% 3.8 3.6 3.7 3.5 3.6 3.6 3.5
Derma 6% 2.8 2.8 2.6 2.9 3.2 3.4 3.1
Anti-Infectives 2% 1.4 1.2 1.2 0.9 0.8 0.8 0.8
Gynaec. 2% 1.2 1.3 1.3 1.5 1.6 1.5 1.7
Antineoplast/Immunomodulator 1% 0.9 0.8 0.5 0.8 1.2 1.2 0.7
Torrent Ph. total 100% 3.4 3.3 3.4 3.2 3.4 3.4 3.4
Source: IQVIA, HSIE Research
Exhibit 10: J.B. Pharma: market share
% of
JB therapy MS % FY25 FY19 FY20 FY21 FY22 FY23 FY24 FY25
sales
Cardiac 44% 2.6 2.8 2.9 3.2 3.7 3.8 4.0
Gastro Intestinal 25% 2.4 2.4 2.5 2.6 2.8 2.9 2.7
Ophthal / Otologicals 8% NA NA 5.9 5.3 5.2 4.6 4.9
Anti-Parasitic 8% 18.7 20.0 24.5 27.8 32.2 34.0 35.6
Gynaec. 4% 0.6 0.7 0.6 0.7 0.9 1.0 1.0
Derma 3% 0.3 0.3 0.3 0.4 0.4 0.4 0.4
Anti-Infectives 2% 0.4 0.3 0.3 0.2 0.2 0.2 0.2
Respiratory 1% 0.1 0.1 0.0 0.1 0.2 0.2 0.2
Vitamins/Minerals/Nutrients 1% 0.3 0.3 0.2 0.2 0.2 0.2 0.2
Pain / Analgesics 1% 0.3 0.3 0.2 0.2 0.2 0.2 0.1
JB total 100% 0.8 0.8 0.9 1.0 1.1 1.1 1.2
Source: IQVIA, HSIE Research
Exhibit 11: Torrent + J.B. Pharma: market share
Therapy mix market share in FY25 Torrent Pharma J.B. Pharma Torrent + JB
Cardiac 7.3 4.0 11.3
Gastro Intestinal 5.7 2.7 8.4
Neuro / Cns 8.4 0.1 8.5
Vitamins/Minerals/Nutrients 4.2 0.2 4.4
Anti Diabetic 3.6 0.1 3.7
Pain / Analgesics 3.5 0.1 3.6
Derma 3.1 0.4 3.6
Anti-Infectives 0.8 0.2 0.9
Gynaec. 1.7 1.0 2.7
Antineoplast/Immunomodulator 0.7 0.0 0.7
Total 3.4 1.2 4.6
Source: IQVIA, HSIE Research

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Torrent Pharma: Company update

Exhibit 12: Torrent Pharma + JB Chemical merger will move Torrent’s rank from 8th to the 5th largest company in
India

Source: IQVIA, HSIE Research

Exhibit 13: Torrent Pharma: brand-wise performance

% of FY25
Torrent Ph. brands YoY Therapy FY25 sales FY20 FY21 FY22 FY23 FY24 FY25
sales (Rs bn)
Shelcal Vitamins/Minerals/Nutrients 4% 3.4 5% 18% 7% 11% 3% -3%
Chymoral Pain / Analgesics 4% 3.2 10% 8% 16% 22% 15% 6%
Nexpro-Rd Gastro Intestinal 3% 2.4 21% 19% 26% 20% 11% 17%
Shelcal Xt Vitamins/Minerals/Nutrients 3% 2.3 50% 12% 41% 35% 25% 6%
Nikoran Cardiac 3% 2.2 6% 15% 10% 15% 14% 10%
Unienzyme Gastro Intestinal 2% 1.6 9% 17% 3% 13% 7% 6%
Nebicard Cardiac 2% 1.4 10% 11% -1% 7% 6% 1%
Losar Cardiac 2% 1.4 6% 12% -9% 6% 6% 8%
Veloz-D Gastro Intestinal 2% 1.3 32% 16% 27% 13% 4% 5%
Nexpro Gastro Intestinal 2% 1.3 15% 11% 15% 12% 9% 20%
Top 10 brands 26% 20.5 12% 58% 10% 16% 10% 6%
11-25 brands 18% 14.0 13% 14% 10% 12% 10% 10%
26-50 brands 15% 12.4 16% 27% 13% 13% 6% 11%
Above 50 brands 41% 33.0 4% -17% 12% 14% 7% 8%
Torrent Ph. Total 100% 79.8 8% 8% 11% 14% 8% 8%
Source: IQVIA, HSIE Research
Exhibit 14: J.B. Pharma: brand-wise performance
% of FY25
JB brands YoY Therapy FY25 sales FY20 FY21 FY22 FY23 FY24 FY25
sales (Rs bn)
Cilacar Cardiac 17% 4.6 17% 13% 19% 18% 20% 19%
Rantac Gastro Intestinal 13% 3.6 11% 23% 19% 22% 4% -3%
Cilacar-T Cardiac 8% 2.2 28% 20% 42% 24% 25% 30%
Metrogyl Anti-Parasitic 8% 2.2 16% 31% 29% 30% 8% 8%
Nicardia Cardiac 7% 2.1 30% 12% 25% 27% 18% 19%
Sporlac Gastro Intestinal 4% 1.2 10% -2% 34% 43% 6% 18%
Azmarda Cardiac 3% 0.7 68% 35% 35% 46% -35% -6%
Vigamox Ophthal / Otologicals 2% 0.7 NA NA 20% 27% 4% 13%
Cilacar-M Cardiac 2% 0.4 33% 24% 36% 17% 17% 17%
Travatan Ophthal / Otologicals 1% 0.4 NA NA 0% 2% -3% 17%
Top 10 brands 66% 18.1 18% 55% 24% 25% 9% 12%
11-25 brands 15% 4.1 13% 18% 16% 14% 23% 18%
26-50 brands 11% 3.0 23% -49% 40% 13% 10% 10%
Above 50 brands 8% 2.3 -7% 37% 28% 12% 1% 4%
JB total 100% 27.5 15% 23% 25% 21% 10% 12%
Source: IQVIA, HSIE Research

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Torrent Pharma: Company update

Exhibit 15: Torrent Pharma: growth drivers Exhibit 16: J.B. Pharma: growth drivers

Source: IQVIA, HSIE Research Source: IQVIA, HSIE Research

Exhibit 17: Revenue, EBITDA and PAT assumptions

% of FY25
(INR mn) FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26E FY27E FY28E
sales
India 56% 32,340 35,170 37,390 42,860 49,840 56,660 63,930 72,880 83,083 93,884
YoY growth 38% 9% 6% 15% 16% 14% 13% 14% 14% 13%
Brazil 10% 6,890 7,150 6,300 7,420 9,350 11,260 11,000 12,320 14,045 15,730
YoY growth -3% 4% -12% 18% 26% 20% -2% 12% 14% 12%
Other countries 10% 6,900 7,660 8,200 8,810 10,600 11,889 11,783 13,432 15,447 17,456
YoY growth 32% 11% 7% 7% 20% 12% -1% 14% 15% 13%
Total branded generics 75% 46,130 49,980 51,890 59,090 69,790 79,809 86,713 98,633 1,12,576 1,27,070
YoY growth 29% 8% 4% 14% 18% 14% 9% 14% 14% 13%
US 10% 15,890 15,230 12,610 10,670 11,620 10,780 11,000 12,224 12,728 12,966
YoY growth 44% -4% -17% -15% 9% -7% 2% 11% 4% 2%
US (USD mn) 227 215 170 143 145 130 130 142 148 151
YoY growth 33% -5% -21% -16% 1% -10% 0% 9% 4% 2%
Germany 10% 10,090 9,470 10,380 9,660 9,280 10,740 11,390 12,529 13,782 15,160
YoY growth 17% -6% 10% -7% -4% 16% 6% 10% 10% 10%
Contract manufacturing 5% 4,603 4,612 5,064 5,472 4,817 5,321 5,427 6,458 7,233 8,101
YoY growth 15% 0% 10% 8% -12% 10% 2% 19% 12% 12%
Others 1% 15 101 102 189 695 628 630 743 877 982
YoY growth -81% 581% 1% 85% 268% -10% 0% 18% 18% 12%
Total revenues 100% 76,728 79,393 80,046 85,080 96,202 1,07,278 1,15,160 1,30,588 1,47,196 1,64,280
YoY growth 29% 3% 1% 6% 13% 12% 7% 13% 13% 12%
Gross profit 54,531 57,724 58,582 60,660 68,850 80,416 87,400 99,508 1,12,458 1,25,839
Gross Margin (%) 71.1% 72.7% 73.2% 71.3% 71.6% 75.0% 75.9% 76.2% 76.4% 76.6%
EBITDA 19,842 21,704 24,801 24,313 28,601 34,068 37,780 43,486 49,605 55,855
YoY growth 47% 9% 14% -2% 18% 19% 11% 15% 14% 13%
EBITDA Margin (%) 25.9% 27.3% 31.0% 28.6% 29.7% 31.8% 32.8% 33.3% 33.7% 34.0%
Adj PAT 7,145 9,533 12,257 10,526 12,574 16,217 19,689 25,308 30,788 35,374
YoY growth 41% 33% 29% -14% 19% 29% 21% 29% 22% 15%
Source: Company, HSIE Research, EBITDA/ PAT adjusted for forex and one-offs.

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Torrent Pharma: Company update

Financials (Consolidated)
Profit & loss (INR mn)
March FY21 FY22 FY23 FY24 FY25 FY26E FY27E FY28E
Net sales 78,862 84,188 94,637 1,05,623 1,13,170 1,30,588 1,47,196 1,64,280
Other operating income 1,183 892 1,565 1,655 1,990 0 0 0
Total operating income 80,046 85,080 96,202 1,07,278 1,15,160 1,30,588 1,47,196 1,64,280
Cost of goods sold -21,464 -24,420 -27,352 -26,862 -27,760 -31,080 -34,738 -38,442
Gross profit 58,582 60,660 68,850 80,416 87,400 99,508 1,12,458 1,25,839
Gross margin (%) 73 71 72 75 76 76 76 77
Total operating expenses -33,781 -36,348 -40,429 -46,740 -50,190 -56,022 -62,853 -69,983
EBITDA 24,801 24,313 28,421 33,677 37,210 43,486 49,605 55,855
EBITDA margin (%) 31.0 28.6 29.5 31.4 32.3 33.3 33.7 34.0
Depreciation -6,578 -6,622 -7,066 -8,083 -7,950 -8,090 -8,187 -8,440
EBIT 18,223 17,691 21,355 25,594 29,260 35,396 41,418 47,415
Net interest -3,529 -2,551 -3,334 -3,536 -2,520 -1,466 -774 -545
Other income 249 270 451 579 230 739 962 933
Profit before tax 14,943 10,564 18,472 23,521 26,730 34,668 41,606 47,803
Total taxation -2,744 -4,487 -6,019 -6,957 -7,620 -9,360 -10,818 -12,429
Tax rate (%) 18 42 33 30 29 27 26 26
Profit after tax 12,199 6,076 12,452 16,564 19,110 25,308 30,788 35,374
Minorities 0 0 0 0 0 0 0 0
Profit/ Loss associate co(s) 0 0 0 0 0 0 0 0
Adjusted net profit 12,257 10,526 12,574 16,217 19,689 25,308 30,788 35,374
Adj. PAT margin (%) 16 13 13 15 17 19 21 22
Net non-recurring items 262 -2,754 -122 347 -579 0 0 0
Reported net profit 12,519 7,772 12,452 16,564 19,110 25,308 30,788 35,374

Balance sheet (INR mn)

March FY21 FY22 FY23 FY24 FY25 FY26E FY27E FY28E
Paid-up capital 846 846 1,692 1,692 1,692 1,692 1,692 1,692
Reserves & surplus 57,526 58,683 60,288 66,869 74,220 85,712 99,670 1,15,691
Net worth 58,372 59,530 61,981 68,562 75,912 87,404 1,01,362 1,17,384
Borrowing 48,741 40,697 53,686 40,219 32,020 19,038 10,055 7,073
Other non-current liabilities 670 2,445 4,556 8,342 9,392 9,486 9,581 9,677
Total liabilities 1,40,747 1,30,998 1,50,119 1,50,606 1,49,904 1,51,821 1,60,864 1,78,085
Gross fixed assets 1,01,703 1,04,687 1,24,741 1,31,465 1,37,363 1,40,713 1,44,363 1,49,413
Less: Depreciation -34,469 -43,055 -46,902 -53,465 -61,294 -69,262 -77,326 -85,644
Net fixed assets 67,234 61,632 77,840 78,001 76,070 71,452 67,037 63,769
Add: Capital WIP 8,894 6,298 7,654 3,605 4,780 4,780 4,780 4,780
Total fixed assets 76,128 67,930 85,494 81,606 80,850 76,232 71,817 68,549
Total Investment 1,811 2,263 1,988 1,728 1,560 1,560 1,560 1,560
Inventory 26,812 24,623 22,296 22,791 25,410 29,382 33,119 36,963
Debtors 15,234 16,325 19,438 18,443 18,670 21,402 24,124 26,924
Cash & bank 6,035 4,034 5,715 8,390 5,790 4,497 10,284 22,874
Loans & advances 51 44 42 56 80 87 95 102
Current liabilities 32,964 28,327 29,896 33,483 32,580 35,893 39,865 43,950
Total current assets 53,862 51,124 51,756 54,730 55,144 61,244 74,245 94,255
Net current assets 20,898 22,797 21,860 21,246 22,564 25,351 34,380 50,305
Other non-current assets 5,533 7,086 7,506 9,162 8,960 9,395 9,851 10,330
Total assets 1,40,747 1,30,998 1,50,119 1,50,606 1,49,904 1,51,821 1,60,864 1,78,085
Source: Company, HSIE Research

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Torrent Pharma: Company update

Cash flow (INR mn)

March FY21 FY22 FY23 FY24 FY25 FY26E FY27E FY28E
Profit before tax 14,943 10,564 18,472 23,521 26,730 34,668 41,606 47,803
Depreciation & Amortisation -6,578 -6,622 -7,066 -8,083 -7,950 -8,090 -8,187 -8,440
Chg in working capital -3,383 -3,519 -182 4,181 -4,810 -4,718 -4,767 -4,914
CF from operations 20,054 18,030 23,681 32,661 25,850 29,582 34,204 38,698
Capital expenditure -3,352 -2,026 -25,739 -4,328 -6,110 -3,350 -3,650 -5,050
CF from investing -4,494 -1,966 -24,153 -1,679 -5,400 -3,350 -3,650 -5,050
Equity raised/ (repaid) 0 0 0 0 0 0 0 0
Debt raised/ (repaid) -5,429 -10,330 4,232 -12,360 -5,290 -12,982 -8,982 -2,982
Dividend paid -3,385 -6,769 -8,630 -10,153 -10,830 -13,919 -16,934 -19,456
CF from financing -16,508 -17,811 774 -27,796 -22,980 -28,368 -26,690 -22,983
Net chg in cash -949 -1,747 302 3,185 -2,530 -2,136 3,864 10,665

Key ratios
March FY21 FY22 FY23 FY24 FY25 FY26E FY27E FY28E
OPERATIONAL
FDEPS (INR) 36.2 31.1 37.2 47.9 58.2 74.8 91.0 104.5
CEPS (INR) 56.4 42.5 57.7 72.8 80.0 98.7 115.2 129.5
DPS (INR) 10.0 20.0 25.5 30.0 32.0 41.1 50.0 57.5
Dividend payout ratio (%) 27.0 87.1 69.3 61.3 56.7 55.0 55.0 55.0
GROWTH
Net sales (%) 1.4 6.8 12.4 11.6 7.1 15.4 12.7 11.6
EBITDA (%) 14.3 (2.0) 16.9 18.5 10.5 16.9 14.1 12.6
Adj net profit (%) 28.6 (14.1) 19.5 29.0 21.4 28.5 21.7 14.9
FDEPS (%) 28.6 (14.1) 19.5 29.0 21.4 28.5 21.7 14.9
PERFORMANCE
RoE (%) 23.0 17.9 20.7 24.8 27.3 31.0 32.6 32.3
RoCE (%) 18.4 17.1 19.6 22.1 25.2 31.0 35.8 37.9
EFFICIENCY
Asset turnover (x) 0.8 0.8 0.8 0.8 0.8 0.9 1.0 1.1
Sales/ total assets (x) 0.6 0.6 0.7 0.7 0.8 0.9 0.9 1.0
Working capital/ sales (x) 0.1 0.2 0.2 0.1 0.1 0.1 0.2 0.2
Receivable days 71 71 75 64 60 60 60 60
Inventory days 177 148 120 113 119 123 124 124
Payable days 137 101 90 104 85 88 89 89
FINANCIAL STABILITY
Total debt/ equity (x) 0.9 0.7 0.9 0.6 0.4 0.2 0.1 0.1
Net debt/ equity (x) 0.8 0.6 0.8 0.5 0.3 0.2 (0.0) (0.2)
Current ratio (x) 1.6 1.8 1.7 1.6 1.7 1.7 1.9 2.1
Interest cover (x) 5.2 6.9 6.4 7.2 11.6 24.1 53.5 87.1
VALUATION
PE (x) 94.2 109.7 91.8 71.2 58.6 45.6 37.5 32.6
EV/ EBITDA (x) 48.2 48.9 42.3 35.2 31.7 26.9 23.2 20.4
EV/ Net sales (x) 15.2 14.1 12.7 11.2 10.4 8.9 7.8 6.9
PB (x) 19.8 19.4 18.6 16.8 15.2 13.2 11.4 9.8
Dividend yield (%) 0.3 0.6 0.7 0.9 0.9 1.2 1.5 1.7
Free cash flow yield (%) 1.4 1.4 (0.2) 2.5 1.7 2.3 2.6 2.9
Source: Company, HSIE Research

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Torrent Pharma: Company update

Price Movement
Torrent Pharma
3700

3500

3300

3100

2900

2700 Rating Criteria

BUY: >+15% return potential
2500
ADD: +5% to +15% return potential
Sep-24

Jan-25

Apr-25
Feb-25

Mar-25

May-25
Aug-24

Dec-24
Jul-24

Oct-24

Nov-24
Jun-24

Jun-25
REDUCE: -10% to +5% return potential
SELL: > 10% Downside return potential

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Torrent Pharma: Company update

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Torrent Pharma: Company update

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