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Informist, Saturday, Jul. 26, 2025

By Devanshi Verma

MUMBAI - Torrent Pharmaceuticals Ltd. is expected to report robust growth in its consolidated net profit for the June quarter and healthy on-year revenue growth driven by strong sales momentum. Analysts expect the company's revenue growth for the reporting quarter to be driven by its strong domestic performance, market diversification, and improved performance in key therapeutic areas.

The company's consolidated net profit for the June quarter is estimated at INR 5.96 billion, up 31% on year and up 20% over the trailing quarter, according to an average of estimates from 10 brokerages. Torrent Pharma is expected to post consolidated net sales of INR 31.52 billion, up 10% on year and 6% on quarter. The company had posted net sales of INR 29.59 billion in the trailing quarter.

The highest estimate for the company's net profit for the June quarter is INR 6.39 billion by Nuvama Wealth Management Ltd. On the other hand, Antique Stock Broking Ltd. has the lowest estimate for the company's net profit at INR 5.73 billion.

Nuvama expects the company's bottom line to rise by 36% on year based on a 12% on-year growth in revenue for its consolidated business. The brokerage firm expects a 12.5% on-year growth in the company's domestic business. However, it also said, "PAT (profit after tax) growth is higher due to lower tax rate." Antique expects the company's on-year profit growth to be driven by differentiated product offering in the US, consolidation of recent acquisitions, and licensing income.

YES Securities (India) Ltd. has the highest estimate for the company's net sales at INR 32.50 billion, as it expects an on-year rebound in the company's sales in Brazil. The lowest estimate for the company's net sales is INR 30.89 billion by JM Financial Institutional Securities Pvt. Ltd., which expects a slight drag from the international market that it estimates will grow by only 7% on year.

"Key market such as India would continue to deliver healthy growth YoY," Prabhudas Lilladher Pvt. Ltd. said. Analysts estimate the Indian business will grow 10-13% on year. HDFC Securities has the highest estimate of 13% growth in the India formulations business, primarily due to traction in the chronic and central nervous system drug segment. Meanwhile, Motilal Oswal Financial Services Ltd. expects domestic formulations to sustain a healthy growth of 11.5%, driven by improved performance in key areas particularly vitamins, minerals, nutrients, anti-diabetic, and cardiac therapies.

The company's US sales are likely to have grown moderately at 5.8% on year for the reporting quarter, Motilal Oswal Financial Services Ltd. said. Other brokerages expect the US business to remain flat on quarter with a projected pickup in the later quarters. Nuvama estimates a 13% year-on-year rise in the US business.

The company's Brazil business, which was down by 6% in the trailing quarter due to the steep depreciation of the Brazilian currency real, is also set to see an improvement. Nuvama estimates a 12% on-year growth in the company's sales in Brazil at INR 2.14 billion. "Brazil sales to grow 8% YoY to (INR) Rs 2.1 bn," Centrum Broking Ltd. said.

For the company's German business, analysts expect a steady on-year growth. Centrum estimates these sales will grow 7% on year to INR 3 billion. However, Nirmal Bang expects a muted on-year growth in the company's German business due to uncertainty in its tender business.

The company's earnings before interest, taxes, depreciation, and amortisation is expected to rise to INR 10.39 billion, up 15% on year, according to the average of estimates from 10 brokerages. The highest estimate is INR 10.9 billion from YES Securities and the lowest estimate is INR 10.0 billion from Centrum. "EBITDA margin is expected to remain healthy at 34%, mainly led by cost rationalization measures," Nirmal Bang said. The company's EBITDA margin is seen at 33.3%, led by strong growth in the domestic business, Nuvama said. Brokerage estimates for EBITDA margin range between 32% and 34%.

The company's acquisition of JB Pharma may be earnings per share dilutive in the initial years due to amortisation, interest charges, and equity dilution, ICICI Securities said. ICICI and Nirmal Bang expect the deal to be cash accretive from financial year 2027-28 (Apr-Mar).

The company will announce its quarterly earnings Monday. Analysts are actively monitoring the ongoing JB Pharma acquisition, diversification of products, and the company's expanding global presence.

Friday, shares of Torrent Pharma closed at INR 3,603.80 on the National Stock Exchange, up 2.4%. The shares have risen 9.6% from May 21, when the company announced its March quarter earnings.

Of the 14 brokerage recommendations on the stock available with Informist, seven have a 'buy' rating with an average target price of INR 3,828 while five brokerages have a 'hold' rating with an average target price of INR 3,485. Two brokerages have a sell recommendation.

Following are the Apr-Jun earnings estimates for Torrent Pharma based on reports from 10 brokerage firms in descending order by the estimate of net profit:

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US$1 = INR 86.51

Edited by Ashish Shirke

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