The brokerage firm Motilal Oswal has reiterated a “Neutral” stance on Torrent Pharma, assigning a price target of Rs 3,430. This translated to 3% above the current market price. The brokerage call hinges on three factors linked to Torrent’s planned buy‑out of JB Chemicals & Pharmaceuticals (JBCP).

Motilal Oswal on Torrent Pharma: Portfolio gets bigger but execution still matters

The deal gives TRP access to a “fast‑growing domestic formulation business with a healthy share of the chronic portfolio.”

Torrent will purchase up to 46.4 % of JBCP for Rs 119 billion (Rs 1,600 per share) and launch a mandatory open offer for another 26 %. Post‑merger, JBCP’s Rs 23 billion domestic sales and 2,800 plus field force slot into Torrent’s Rs 64 billion India franchise. While the therapeutic overlap can create synergy, Motilal Oswal flags integration risk and the need for clarity on cross‑selling plans.

Motilal Oswal on Torrent Pharma: Numbers add up, but they are not cheap

Motilal Oswal sums up the price tag with “Valuation supports strategic rationale.”

As per the brokerage report, Torrent will pay 30.7 × FY26E earnings (27 × FY27E) or 22 × FY26E EBITDA for JBCP. That headline multiple is lower than Torrent’s own 47 × FY26 earnings, yet it still sits well above sector averages.

The brokerage house views the valuation as fair but not a bargain.

Motilal Oswal on Torrent Pharma: Funding mix could dent near term EPS

Torrent Pharma carries roughly Rs 22.5 billion of net debt already. If the entire cash outgo is financed with new borrowing, the brokerage models a 10.5 % earnings dilution in FY27.

“Ex-JBCP, we expect TRP to deliver 12%/14%/23% revenue/EBITDA/PAT CAGR over FY25-27. We value TRP at 38x 12M forward earnings to arrive at a price target of Rs 3,430. While the deal is positive, we reiterate our Neutral rating on the stock due to limited upside from the current levels,” the brokerage noted in its report.