Brokerages positive on medium-term prospects of Torrent-JB Chemicals merger

Brokerages are positive on the prospects of Torrent Pharmaceuticals after it announced a ₹25,689 crore deal to buy out JB Chemicals and Pharmaceuticals, even though the acquisition comes with a premium and is expected to dilute near-term earnings.

 

Given the synergies, Torrent’s execution track record, and minimal overlap in therapeutic categories, brokerages expect the deal to be value-accretive over the medium term. After the merger, Torrent will break into the top five pharmaceutical companies in the country, with a revenue base of ₹15,400 crore. The merger is expected to be completed over the next 15–18 months.

 

Torrent is paying 6.6x