According to reports from Prabhudas Lilladher, the brokerage has issued a buy rating on Torrent Pharmaceuticals with a target price of Rs 5,000 per share. The recommendation is based on the company's strong fundamentals and strategic acquisitions, with the brokerage maintaining its positive outlook on the pharmaceutical sector.
As reported by Prabhudas Lilladher, Torrent Pharma delivered a steady quarter with base business Q1FY27 EBITDA growth of 16% YoY, which was in line with the brokerage's estimates. The company's performance demonstrates consistent operational execution and growth momentum in its core business segments, with recent quarterly results showing net sales of Rs 2,735 crore, up 12.41% YoY on standalone basis.
According to the research report, the acquisition of JB Chemicals & Pharma (JBCP) appears strategically compelling and will make Torrent Pharma the 5th largest player in the domestic pharma market. The deal is expected to strengthen the company's position in high-margin chronic therapies and open up newer therapeutic areas for expansion, with the combined entity expected to achieve combined entity EBITDA of Rs 77-78 billion in FY28.
As reported by Prabhudas Lilladher, the cost synergies guidance of Rs 4-4.5 billion from the JBCP acquisition is considered positive. The brokerage expects the combined entity EBITDA to be at Rs 77-78 billion in FY28, with the deal also adding JBCP's CDMO vertical, offering diversification and growth optionality for the expanded business. The acquisition is strategically positioned to enhance the company's market position and operational capabilities.
According to the research report, Prabhudas Lilladher maintains its 'BUY' rating with a revised target price of Rs 5,000 per share, valuing the combined entity at 26x EV/EBITDA on FY28E. The brokerage notes that the strong headstart in Sema franchise will continue to drive higher growth in domestic formulation, supporting the positive investment thesis for the pharmaceutical company. Recent market response shows Torrent Pharma shares jumping 6% as brokerages remain bullish following the quarterly results.
