The Indian pharma industry appears to be following the mantra – bigger is better – at a time when the Trump administration is planning to impose higher tariffs on pharma imports along with increased inspections by the US FDA at overseas production sites. And the Indian pharma industry has seen several M&A transactions over the past few quarters with the latest being Torrent Pharma acquiring the promoter shareholding of 46.39 % in J B Chemicals and Pharmaceuticals at Rs 1,600 per share.
The above transaction has been done on a valuation metric, enterprise value (EV) to consolidated FY 25 sales at about 6.3 times. J B Chemicals and Pharmaceuticals had reported consolidated revenue from operations of Rs 3,917.99 crore during FY 25.
For small investors, Torrent Pharma has announced an open offer at Rs 1,639.18. The J B Chemicals and Pharmaceuticals stock ended Monday trade 6.6 % lower at Rs 1,679.8, and small investors will be closely monitoring the stock price every day and the open offer price.
Earlier, in March 2025, Zydus Lifesciences had announced the acquisition of 85.6% stake in France-based Amplitude Surgical for Euro 256.8 million (nearly Rs 2,380 crore). This transaction was at enterprise value to sales for year ended June 2024, of nearly 3 times.
The acquisition by Torrent Pharma will strengthen its product portfolio in fast growing segments like cardiology, gastroenterology and pediatric as well as provide an entry into segments like ophthalmology, IVF and nephrology. In addition, Torrent Pharma is also expected to be amongst the top 5 players in the domestic pharma industry by sales, as per industry data.
Torrent Pharma has over the years grown sales and expanded into newer product segments via earlier acquisitions of Curatio and the India business of Unichem Laboratories. The Torrent Pharma stock rose nearly 2 % to close at Rs 3,409.7 on Monday, and it is not too far from its 52-week high of Rs 3,590 that was reached on 10 October 2024.
Financial performance during FY 25
J B Chemicals and Pharmaceuticals reported a 12.4% y-o-y growth in its consolidated revenue from operations to Rs 3,917.99 crore during FY 25 while its operating profit margin improved nearly 60 basis points to 26.4 per cent during the financial year. Its consolidated net profit rose 19.4 % y-o-y to Rs 659.58 crore during FY 25.
Meanwhile, Torrent Pharma’s consolidated revenue from operations grew 7.3 % y-o-y to Rs 11,516 crore during FY25 while its consolidated net profit grew 15.4 % y-o-y to Rs 1,911 crore during the financial year.
Investors on Dalal Street
Investors on Dalal Street will be closely watching the Trump administration and the protectionist measures they have planned. Torrent Pharma is trading close to its 52-week high.
Other leading stocks like Cipla ended Monday’s trade at Rs 1,505.3 and it trades with a P/E of 19 times estimated consolidated FY26 earnings. Dr Reddy’s Laboratories at Rs 1,283.7 trades at a P/E of more than 17 times estimated consolidated FY 26 earnings.
Investors could wait for corrections in the broader pharma sector stocks before making any investments on a long-term basis.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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