Torrent Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹4,558.90−₹25.20 (−0.55%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by moderate debt load, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Torrent Pharmaceuticals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Torrent Pharmaceuticals Limited engages in the research, development, manufacturing, marketing, and distribution of branded and generic pharmaceutical formulations in India, the United States, Brazil, Germany, Malta, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees18,258

Annual revenue₹13,753 Cr

How does it make money?

Turns over ₹13,753 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹32 left at the operating level before interest, tax and depreciation. Each of its 18,258 employees supports ₹75.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹75.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What is the outlook?

26 analysts covering the stock expect revenue to grow about 12.6% and earnings to grow about 38.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.6%

Est. earnings growth+38.4%

Analysts26

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +45% while net margin moved +20% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+45%

Margin effect+20%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 72.8x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 69.6x
✗ P/B of 18.39x is a steep premium to book

Quality vs. Valuation

Company Quality

71/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

32/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

72.8x

3Y Median

69.6x

40 monthly readings · mean 69.4x · range 50.1x–90.7x

Sector Median

33.3x

median of 4 sector peers

🟡Currently trading close to its 3y median of 69.6x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 118% above the peer median of 33.3x.

vs. its own history

Fair

69.6x median over 40 months · +5%

vs. sector peers

Expensive

33.3x median of 4 peers · +118%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

42.4x

PEG

3.60

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 30.1% to 32.1% over 3 years.
Cash generation is improving
Free cash flow is up 31% over 3 years.
Return on equity is rising
ROE has improved from 20.1% to 25.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 22.8% to 9.1% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 180% over 3 years, from ₹5,369 Cr to ₹15,026 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 30.1% to 32.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 118% above the peer median. That premium needs a reason that persists, or it closes.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.3% CAGR
Latest reported year was 54.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 30%✓ 32.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✓ ₹2,345 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 9.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹1.73 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

72.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

18.39x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹62.6

Profitable

Profitable on a per-share basis

ROE

25.8%

Strong

Strong capital efficiency

ROCE

9.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.85x

Moderate

Moderate leverage

Revenue Growth (YoY)

54.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-8.2%

Falling

Profits are shrinking

Dividend Yield

0.83%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹2,345 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

48.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

21.8%

Good

Healthy core-business profitability

Net Margin

13.9%

Good

Strong bottom-line conversion

Current Ratio

1.13

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.14

Defensive

Steadier than the market

52W Range Position

60%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4778.0 / 4869.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

15.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹9,464 Cr	₹10,562 Cr	₹11,317 Cr	₹13,753 Cr	+13.3%
EBITDA	₹2,845 Cr	₹3,407 Cr	₹3,725 Cr	₹4,416 Cr	+15.8%
EBITDA Margin	30.1%	32.3%	32.9%	32.1%	—
PAT (Net Profit)	₹1,245 Cr	₹1,656 Cr	₹1,911 Cr	₹2,163 Cr	+20.2%
EPS	₹36.79	₹48.94	₹56.47	₹63.92	+20.2%
ROE	20.1%	24.2%	25.2%	25.8%	—
ROCE	22.8%	28.1%	28.5%	9.1%	—
Total Debt	₹5,369 Cr	₹4,022 Cr	₹3,202 Cr	₹15,026 Cr	+40.9%
Free Cash Flow	₹1,794 Cr	₹2,833 Cr	₹1,973 Cr	₹2,345 Cr	+9.3%

🟢 Revenue has grown at 13.3% a year over 3 years.

🟢 EBITDA has grown at 15.8% a year over 3 years.

🟢 EBITDA Margin has risen from 30.1% to 32.1% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 20.2% a year over 3 years.

🟢 EPS has grown at 20.2% a year over 3 years.

🟢 ROE has risen from 20.1% to 25.8% over 3 years (+5.7 pts).

🔴 ROCE has fallen from 22.8% to 9.1% over 3 years (-13.7 pts).

🔴 Total Debt has grown at 40.9% a year over 3 years.

🟢 Free Cash Flow has grown at 9.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹44,312 Cr

Total Liabilities

₹26,727 Cr

Cash & Equivalents

₹1,117 Cr

Operating Cash Flow

₹3,023 Cr

Capex

-₹677 Cr

Shareholding (proxy)

Institutional Holding

20.5%

Insider Holding

63.2%

Corporate Actions

Next Earnings

06 Nov 2026

Dividend Rate

₹38

Ex-Dividend Date

29 May 2026

Analyst Consensus

Recommendations

22 Buy · 5 Hold · 1 Sell

Target Price (Mean)

₹5,481.14

+20.2% vs CMP

Target Range

₹4,670 – ₹6,194

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

3 mixed3 general

Torrent Pharma removes Patel, Jaiswal, Nadkarni from SMP panel

scanx.trade, 18 Oct

TORNTPHARM Outlook for the Week

Equitypandit, 09 Oct

Dr Reddy’s, Torrent Pharma, Zydus Life: Pharma stocks to post resilient growth in Q2 earnings despite pricing headwinds

Upstox, 13 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Torrent Pharma Allots 4.19 Crore Shares After JB Chemicals Merger

HDFC Sky, 21 JulM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Torrent Pharmaceuticals (TORNTPHARM) Share Price Falls 2.34% as Large Cap Valuation Stays in Focus

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Torrent Pharmaceuticals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 28 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Profitability · Risk

MiddlingBusiness Quality

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Debt / EBITDA falls below 3x · see Key things to watch ↑