Motilal Oswal has maintained a Neutral rating on Torrent Pharma with a target price of ₹4,730 in its research report dated July 31, 2026. According to the brokerage's analysis, the valuation is based on 50x 12-month forward earnings, factoring in earnings upside potential while maintaining a cautious stance on the stock. With much of the earnings upside already reflected in valuations, the rating by Motilal Oswal Financial Services remains Neutral.
Torrent Pharma delivered better-than-expected financial performance in 1QFY27, with 6%/9%/9% beat in revenue/EBITDA/PAT. As reported by Motilal Oswal, the upside was driven by robust growth in domestic branded formulations and steady momentum in US generics, partly offset by subdued performance in Brazil and Germany. The performance was supported by currency tailwinds that helped boost reported growth in international markets, with the company outperforming the Indian Pharma market by a wide margin of 700 basis points.
According to Motilal Oswal's report, Torrent Pharma domestic formulations significantly outperformed the Indian Pharma Market by ~700bp, aided by healthy price growth, volumes and new launches. The Curatio portfolio saw strong 34% YoY growth, partly driving overall DF growth for the quarter. In the US market, new launches and favourable currency movements supported growth and helped the business turn profitable, with the company continuing to outperform underlying market growth led by superior execution.
With the full integration of JB Chem in place, the cost synergy has started showing benefits in margin of JB Chem business, with ~35% EBITDA margin achieved in 1QFY27. As reported by Motilal Oswal, certain one-time inventory reduction impacted Brazil's constant-currency growth, though Torrent Pharma continued to outperform the underlying market. However, rationalisation of JB Chem's low-margin products across domestic and international businesses could constrain near-term revenue growth.
According to Motilal Oswal's analysis, FY27/FY28 estimates are largely unchanged with India and the US remaining on healthy growth trajectories, while Germany continues to remain weak on a constant-currency basis. EBITDA margin is expected to expand by ~300bp, driving a 31% EBITDA CAGR over FY26-28E, though higher depreciation and interest costs should limit earnings CAGR to ~23%. The company's strong performance across key markets and successful integration benefits position it well for sustained growth despite near-term margin pressures from product rationalisation.
