1. At a Glance
Torrent Pharma just flexed its balance sheet – ₹548 Cr profit in Q1 FY26, 11% sales growth, and a blockbuster ₹11,917 Cr acquisition of J.B. Chemicals stake. The company also raised its borrowing limit to ₹26,000 Cr because apparently, shopping is their new cardio.
2. Introduction
Imagine a pharma player that doesn’t just make pills, it swallows entire companies for breakfast. Torrent Pharma, the flagship of the Torrent Group, is doing exactly that – strong margins (32% OPM), a fat dividend policy, and a global playbook that’s working.
3. Business Model – WTF Do They Even Do?
- Branded Generics: 74% revenue share, across India & Brazil.
- Therapeutics: Cardio, CNS, diabetes, dermatology – all the boring but money-making segments.
- Growth Lever: Expansion in chronic therapies, R&D, and global acquisitions.
4. Financials Overview
- Q1 FY26 Revenue: ₹3,178 Cr (+11%)
- Operating Profit: ₹1,032 Cr (OPM 32%)
- Net Profit: ₹548 Cr (+20%)
Verdict: Healthy numbers, no prescription needed.
5. Valuation – What’s This Stock Worth?
- P/E: 61x (premium pricing like their drugs)
- Book Value: ₹224 (P/B 16x)
- Fair Value Range: ₹3,200–₹3,900
Punchline: The stock trades like a branded medicine – pricey, but people still buy.
6. What-If Scenarios
- Bull Case: Successful JB Chemicals integration → ₹4,200
- Bear Case: Regulatory hiccups or debt spike → ₹3,000
- Base Case: ₹3,500–₹3,800, steady growth & M&A execution.
7. What’s Cooking (SWOT)
Strengths: Strong branded generics portfolio, high ROE, aggressive M&A.
Weakness: High P/E, rising debt.
Opportunities: Global expansion, chronic therapy dominance.
Threats: USFDA scrutiny, integration risks with JB Chemicals.
8. Balance Sheet 💰
| Particulars (Mar’25) | Amount (₹ Cr) |
|---|---|
| Equity Capital | 169 |
| Reserves | 7,421 |
| Borrowings | 3,202 |
| Total Liabilities | 14,396 |
| Comment: Leverage is low now, but watch it post-acquisition. |
9. Cash Flow (FY23–FY25)
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | 2,368 | -2,335 | 77 |
| FY24 | 3,266 | -160 | -2,780 |
| FY25 | 2,585 | -549 | -2,298 |
| Snark: Strong operational cash flows – this is how you fund expensive shopping. |
10. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 26.5% |
| ROCE | 27.0% |
| D/E | 0.4x |
| OPM | 32% |
| P/E | 61x |
| Punchline: Ratios look like a gym freak’s stats – ripped. |
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 9,620 | 2,842 | 1,245 |
| FY24 | 10,728 | 3,368 | 1,656 |
| FY25 | 11,516 | 3,721 | 1,911 |
| TTM | 11,835 | 3,849 | 2,002 |
| Comment: Topline steady, margins improving, bottom line swelling nicely. |
12. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Sun Pharma | 52,578 | 11,454 | 35 |
| Cipla | 27,811 | 5,379 | 24 |
| Torrent Pharma | 11,835 | 2,002 | 61 |
| Peer verdict: Torrent is small vs. Sun, but trades like it’s already a king. |
13. EduInvesting Verdict™
Torrent Pharma is playing big with bold M&A moves. High valuations are justified only if the JB Chemicals acquisition delivers synergies.
Written by EduInvesting Team | 28 July 2025
Tags: Torrent Pharma, JB Chemicals Acquisition, Pharma Earnings, EduInvesting Premium
