High-growth segments, acquisition to drive gains for Torrent Pharma

Led by the India business and rest-of-the-world markets, the company reported a robust 14.3 per cent year-on-year (Y-o-Y) growth in revenues

Strong performance in the July–September quarter of 2025–26 (FY26) and expectations of growth from launches and acquisition-led synergies led to a 6.65 per cent jump in the share price of pharmaceutical (pharma) major Torrent Pharmaceuticals. Several brokerages have upgraded the stock — currently trading at ₹3,817 — citing upward earnings estimates for 2026–27 (FY27).

 

Driven by its India business and Rest of the World markets, the company reported a robust 14.3 per cent year-on-year (Y-o-Y) increase in revenue. Torrent continues to outperform the domestic market due to its strong presence in high-growth therapeutic segments. The company posted 11.5 per cent growth in India, led by cardiac and gastrointestinal therapies, compared with overall Indian pharma market growth of 8 per cent. Volumes contributed 3.7 per cent, price growth 5.5 per cent, with the remainder coming from new products.

 

ICICI Securities expects Torrent’s India business to grow at an annual rate of 11.2 per cent from 2024-25 (FY25) through 2027-28 (FY28), driven by higher volumes and price hikes. Growth is also expected to be supported by the integration of JB Chemicals, which Torrent acquired earlier this year.

 

The domestic market — accounting for about 57 per cent of Torrent’s consolidated sales — continues to shape the company’s overall growth trajectory. ICICI Securities has a ‘hold’ rating with an unchanged target price of ₹3,530. The brokerage said launches, productivity improvements, and price hikes are among the key drivers of revenue growth across segments. It has trimmed its FY26 earnings per share (EPS) estimate by 3 per cent to factor in lower other income. 

 

Revenue from Latin American markets grew 14 per cent Y-o-Y in constant currency terms. A favourable exchange rate between the Brazilian real and the Indian rupee boosted growth in rupee terms.

 

The Latin American business is expected to maintain low double-digit growth going forward. Torrent plans to launch the generic version of semaglutide in both India and Brazil and aims for a 15 per cent market share in Brazil’s $1 billion market for the product.

 

The US business posted constant-currency growth of 21 per cent, driven by launches such as the generic version of heart failure drug Entresto. Analysts at Elara Securities, led by Bino Pathiparampil, note that the US business has shown an uptick since the first quarter after five years of lacklustre performance. The company expects the trend to continue, supported by recent product launches and facility clearances.

 

Torrent is once again viewing the US as a key growth opportunity and is investing in product development for the market. Elara has an ‘accumulate’ rating on the stock and has raised its target price to ₹4,137, saying the premium valuation is justified by deleveraging-led EPS growth and higher cash generation.

 

JM Financial has upgraded the stock to a ‘buy’. It projects annual revenue growth of 14 per cent, operating profit growth of 15 per cent, and net profit growth of 25 per cent over FY25–28. Analysts Amey Chalke and Abin Benny said the gains come with a 149-basis-point margin expansion, supported by pricing-led growth and improving US profitability from launches.

 

With Competition Commission of India approval secured for the JB Chemicals merger, Torrent is expected to take control ahead of schedule, with synergy benefits likely to reflect in earnings from 2026–27. JM Financial values the company at 27 times enterprise value to operating profit and has set a target price of ₹4,255.