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Torrent’s JB acquisition- quest for India focused assets continues

ICICIdirect Research 04 Jul 2025 DISCLAIMER

Background

Torrent is willing to buyout PE firm KKR’s 46% stake (and subsequent open offer for another 25%) in JB Chemicals and Pharmaceuticals.
For FY25 JB registered sales of ~ ₹ 3900 crore with an EBITDA of ₹1030 crore (26.3% Margin). JB is India focused company which derives ~58% of sales from India branded formulations.

It has a strong brand loyalty among doctors especially in therapies such as Cardiovascular, Gastrointestinal and Ophthalmics among others.


Our Take

At a valuation ₹25,700 crore, the deal values JB chemicals at 5x FY27E sales and ~20x FY27E EBITDA which seems fair considering JB’s India franchisee and exports business that includes CDMO segment.

The valuation is also in sync with torrent’s earlier acquisitions such as Elder, Unichem and Curatio which ranged between 4-6x of forward sales.
Domestic MR productivity of JB is ₹ 8 lakh per month which is almost similar to that of Torrent. Torrent also expects significant procurement synergies in future.

We believe this deal is a long term positive for Torrent which has a strong track record of acquiring domestic portfolios and expediting the payback by realigning the acquired assets with Torrent’s strategies. The deal will also enable Torrent to make its maiden entry into CDMO exports segment.
 

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