Morgan Stanley has reversed its preference between two of India's leading pharmaceutical companies after the June quarter earnings, upgrading Torrent Pharmaceuticals while downgrading Mankind Pharma. According to reports from The Financial Express, the brokerage says Torrent Pharma now offers a stronger combination of earnings growth, integration-led gains from JB Pharma and a clearer opportunity in GLP-1 therapies, while Mankind Pharma's recent rally has left comparatively limited room for further upside despite healthy business momentum. The latest brokerage updates show Torrent Pharma upgraded to 'Overweight' from 'Equal-weight' with a target price of ₹5,623, while Mankind Pharma was downgraded to 'Equal-weight' from 'Overweight' with a target price of ₹2,735.
Morgan Stanley has upgraded Torrent Pharmaceuticals to 'Overweight' from 'Equal-weight' and raised its target price to ₹5,623, which implies an upside of about 39.6%. As reported by The Financial Express, the brokerage added that the investment case on Torrent has strengthened considerably since it initiated coverage. Faster execution of the JB Pharma integration, improving earnings visibility and a stronger long-term growth profile prompted the upgrade and a higher valuation multiple. According to the brokerage, integration-related benefits are arriving ahead of schedule, with cost synergies already moving beyond the initial target of ₹900 million and now expected to exceed ₹1 billion. The latest updates show JB cost synergies running ahead of plan, with the target multiple raised to reflect superior chronic franchise and integration execution.
Another key factor behind the positive view is Torrent's position in GLP-1 therapies. According to The Financial Express, the brokerage says the company has secured a 36% market share in semaglutide and a 94% share in oral semaglutide in India, strengthening its presence in one of the fastest-growing therapy categories. Torrent's base business revenue increased 19% year-on-year in the June quarter, while EBITDA rose 20% and operating margin stood at 33%. The brokerage expects revenue synergies from cross-selling, portfolio expansion and a larger sales force to become increasingly visible as the JB Pharma integration progresses.
Morgan Stanley has downgraded Mankind Pharma to 'Equal-weight' from 'Overweight' and assigned a target price of ₹2,735, implying an upside of about 10.6%. As reported by The Financial Express, the downgrade is driven by valuation rather than any deterioration in the company's business performance. The brokerage noted that Mankind Pharma's shares have gained about 30% since the end of March, compared with around 19% for the Nifty Pharma index over the same period, leaving relatively limited scope for additional gains. The company's June quarter performance remained broadly in line with expectations, with revenue increasing 13% year-on-year and EBITDA margin expanding to 26%. The latest updates show domestic organic growth improved to 10.6% year-on-year but still trails the broader IPM at 13.6%, with management holding back on GLP-1 launch given a crowded market.
According to The Financial Express, Morgan Stanley's latest rating changes are based on relative risk-reward rather than a negative view on Mankind Pharma. The brokerage said its latest rating changes are based on relative risk-reward rather than a negative view on Mankind Pharma. Torrent Pharmaceuticals now offers a stronger mix of earnings visibility, integration-led gains, operating leverage and growth opportunities through GLP-1 therapies, while Mankind Pharma continues to deliver healthy operational performance but much of that improvement has already been recognised by the market. The management continued to guide for double-digit domestic growth during FY27 and has maintained EBITDA margin guidance of 25.5% to 26.5%. The latest updates show Mankind Pharma's target multiple cut to a 20% discount to Torrent Pharma, reflecting the relative valuation gap between the two companies.
