India outperformance, synergy gains to keep Torrent Pharma growth strong

Strong domestic growth, a chronic-heavy portfolio, JB Pharma integration benefits and gains in semaglutide are expected to support Torrent Pharma's near-term performance

Double-digit growth in the Indian pharmaceutical market this year, strong presence in higher-margin chronic therapies and synergy benefits of acquisitions are positives for pharma major Torrent Pharmaceuticals.

 

The company has been outperforming peers in the domestic pharma market which accounts for about 50-55 per cent of its revenues and remains the key growth driver of consolidated performance.

 

This, coupled with upsides from the diabetes and weight loss drug Semaglutide in India and its expected launch in the Brazilian market, should drive incremental gains and remain near-term catalysts.

 

The stock ( ₹4,930) has outperformed the BSE 200 with a return of 11 per cent in the last three months. The growth in the Indian market and the benefits from the JB Pharma integration are important triggers for the stock.

 

The company continues to outperform the Indian pharma market and is benefiting from the strong domestic growth. The pharma market has posted a double-digit growth for nine consecutive months.

 

It grew 10.7 per cent year-on-year (Y-o-Y) (in terms of sales) in August and this was largely driven by price increases (6.1 per cent), new product launches (contribution of 3.5 per cent) and volume growth of 1.1 per cent.

 

Nomura Research points out that pharma market growth has picked up in CY26 and has been trending in double digits this year.

 

Saion Mukherjee and Kushal Chovatia of the brokerage highlight that the recovery of growth rate is being driven by low volume in the base and a pick-up in new launch contribution like GLP-1 (60 basis points or bps).

 

It is also because of a pick-up in chronic therapies, such as cardiac and oncology, and strong growth in vitamins, minerals and nutrients as well as gynaecology.

 

Torrent Pharma posted a 15.1 per cent Y-o-Y growth in August as compared to 14.8 per cent growth in the trailing 12 months ended August, outperforming the domestic market by about 500 bps.

 

In the Semaglutide market, four players have launched generic semaglutide in a cartridge (reusable device) format, and within this category, Torrent surpassed Zydus to become the market leader with a 34 per cent market share in August 2026. In oral solids, Torrent remains the market leader with a 90 per cent market share.

 

In the June quarter, the company outperformed the domestic market by 700 bps, led by a healthy growth in price, volume and new launches.

 

This was led by the acquired Curatio portfolio which saw a strong 34 per cent Y-o-Y growth and aided the overall growth in the domestic market. 

 

The company reiterated its double-digit revenue growth target for the combined India (including integrated JB Chemicals from July 2026).

 

Cost synergies from the acquisition are tracking ahead of the plan and the company expects FY27 synergy realisation to surpass ₹100 crore against initial estimates of ₹90 crore.

 

The contract development and manufacturing business of JB Chemicals is expected to deliver high single-digit to low double-digit constant currency growth in FY27.

 

Motilal Oswal Research expects a 28 per cent annual growth in the India business over FY26-28, driven by continued chronic portfolio expansion, stable Semaglutide momentum, market share gains and integration synergies from JB Pharma.

 

The brokerage values Torrent Pharma at 50 times one-year forward earnings to arrive at a target price of ₹4,730.

 

It, however, has a neutral rating on the stock as valuations factor in the upside.

 

In addition to the strong show of the Indian market in the June quarter, the US market also delivered steady growth.

 

US revenue grew 36 per cent Y-o-Y while the growth in constant currency was at 23 per cent and was driven by product launches.

 

In addition to launches, expansion of the existing business and differentiated generic opportunities are expected to drive a 12 per cent growth in the next two years. 

 

HDFC Securities believes Torrent Pharma (excluding JB Chemicals) is well-poised for steady growth, led by a strong branded franchise and steady growth in the US generics (new launches), with margins remaining stable at 33-35 for the next few years. It has an ‘add’ rating with a target price of ₹5,270.