Torrent Pharma 4Q26 results beat expectations, with strong growth maintained in India and Brazil

Overview

This report is Goldman Sachs' review of Torrent Pharma (TORP.BO)'s 4Q26 results. The company's quarterly performance exceeded both Goldman Sachs and Bloomberg consensus expectations, with sales and adjusted EBITDA up 42% and 38% YoY, respectively, mainly driven by Brazil, the US, and India. Adjusted EBITDA margin was 32.3%, down 84 basis points YoY, partly affected by JB Pharma's lower-margin mix.

Core views

The core view is that Torrent Pharma still has the ability to outperform the industry in the India and Brazil markets, while the US and Germany are expected to maintain stable single-digit growth. India business was jointly driven by chronic therapies, pricing, volume, and new product launches; Brazil business remained strong on the back of price hikes and new products. Goldman Sachs also lowered or maintained its FY27-FY29E EPS forecast range, reflecting 4Q data and the latest management outlook.

Analysis framework

The report mainly uses earnings comparison and management outlook updates, comparing 4Q26 actual sales, adjusted EBITDA, and margin against Goldman Sachs and market expectations, while assessing operating trends in combination with regional business growth, pricing/volume/new product breakdown, JB Pharma synergy progress, and future EPS forecast revisions.

Methodology notes

• equity factor analysisGS Factor Profile

  growth, financial returns, valuation multiples, and composite score

  Goldman Sachs' factor framework compares companies with the market and industry peers on a percentile basis through forward sales, EBITDA, and EPS growth, return metrics such as ROE, ROCE, and CROCI, and valuation metrics such as P/E, P/B, and EV/EBITDA.

• M&A probability assessmentM&A Rank

  tiered probability of being acquired

  Goldman Sachs assesses the likelihood of a company becoming an acquisition target across its global coverage using qualitative and quantitative factors, where 1 represents high probability, 2 medium probability, and 3 low probability.

• financial databaseQuantum

  Goldman Sachs' proprietary database for financial data, forecasts, and ratios

  Quantum is used to review a company's historical financial statements, forecasts, and ratios, supporting both in-depth single-company analysis and cross-industry, cross-market comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Torrent Pharma (TORP.BO)

  primary subject of report coverage

  Strengths

  India business outperforms IPM, Brazil growth is strong, chronic therapies and Semaglutide provide incremental upside, and JB Pharma offers room for synergy realization.

  Weaknesses

  Adjusted EBITDA margin declined YoY, and JB Pharma's margin mix is lower; the US and Germany are only expected to see single-digit growth.

  Comparison

  4Q26 results were above Goldman Sachs and Bloomberg consensus expectations; India business growth of 16% was above the industry's roughly 10% growth in IPM.

  Risks

  Synergy realization may come in below expectations, volume declines in Brazil may continue, margins may remain under pressure, and regulatory or transaction-related restrictions may prevent a rating and target price from being available.

Key data

• 4Q26 sales growth+42% yoyAbove Goldman Sachs and Bloomberg consensus expectations.
• 4Q26 adjusted EBITDA growth+38% yoyMainly driven by performance in Brazil, the US, and India.
• Adjusted EBITDA margin32.3%Down 84 basis points YoY, affected by JB Pharma's lower-margin mix.
• India business growth+16% yoyAbove IPM's roughly 10% growth; chronic therapies business grew 13% YoY.
• India growth breakdownprice +6.7%, volume +3.8%, new products +3.4%Reflects contributions from pricing, volume, and new products together.
• Potential annual contribution from SemaglutideRs2-2.5bnApril sales were Rs170mn, of which injectables were Rs110mn and oral formulations accounted for about 20%-30% of the total.
• Brazil business growthabout +30% yoy; +11% at constant currencyMid-single-digit price hikes and new product launches offset part of the volume decline.
• JB Pharma synergy targetRs4.5bnAbout 20% is expected in year 1 and 60%-80% in year 2.
• EPS forecast revisionFY27-FY29E at -3% to 0%Reflects 4Q data and the latest management outlook.

Impact & implications

The earnings beat and continued industry outperformance in India and Brazil enhance confidence in the company's medium- to long-term operating resilience; however, margins are affected by JB Pharma's consolidated business mix, and Goldman Sachs maintains a Not Rated stance due to transaction-related or policy constraints, so the investment conclusion reflects more of an operating trend update than a clear rating or target price recommendation.

Risks

• JB Pharma integration and synergy realization may be slower than management expects.
• The lower-margin business mix may continue to pressure adjusted EBITDA margin.
• Although Brazil is growing strongly, the report notes that volume declines offset part of the contribution from price increases and new products.
• The US and Germany businesses are expected to deliver only stable single-digit growth, contributing limited support to overall growth.
• Goldman Sachs has an investment banking services relationship and strategic matter financial advisory disclosures with Torrent Pharma, so potential conflicts of interest should be monitored.

What to watch

• Whether the India business can continue to outperform IPM, especially market share and MR productivity in chronic therapies.
• The improvement in sales efficiency after adding about 400 new MRs in FY27.
• Whether full-year Semaglutide sales contribution reaches the expected Rs2-2.5bn.
• Whether the Brazil market can maintain the company's target growth rate of 10%-15% on a constant-currency basis.
• The realization rate of JB Pharma's Rs4.5bn synergies in year 1 and year 2.
• Whether FY27-FY29E EPS forecasts are further revised.