Stock Price of Torrent Pharma Rise After Elder Deal
Biswajit Yadav / 10 Apr 2014
The stocks of the Torrent Pharmaceuticals has gone up by more than 9% to Rs 608 on BSE. This is after Competiton Commission of India (CCI) approved the company's proposal of acquiring Elder Pharmaceutical's formulations business in India and Nepal. The acquisition is worth Rs 2,000 crore.
The stocks of the Torrent Pharmaceuticals has gone up by more than 9% to Rs 608 on BSE. This is after Competition Commission of India (CCI) approved the company's proposal of acquiring Elder Pharmaceutical's formulations business in India and Nepal. The acquisition is worth Rs 2,000 crore.
Elder Pharmaceutical is engaged in the business of manufacturing and marketing of prescription pharmaceutical brands, surgical and medical devices. It is mainly present in three therapeutic segments, women's healthcare, wound care and neutraceuticals. The Torrent Pharmaceutical has got the clearance to acquire the Elder pharma's formulation business in India and Nepal. Both the companies are engaged in production and sale of generic medicines. The commission informed that this acquisition will not affect the competition in India as the market share of both companies are not enough to raise any competition concern.
As per the report, the company will acquire around 30 brands across the segments of women's healthcare, nutraceuticals and pain & wound management. This deal will help Torrent Pharma to expand its business in the Women's healthcare segment. During Q3FY14, Torrent Pharma posted a topline growth of around 29% on YoY basis and bottomline of the company was up by 41% on YoY basis as compared to the same period of previous year.
Talking about Elder Pharma, the company has total long term borrowings worth Rs 704 crore till June 2013. The company has also posted losses worth Rs 21.38 crore during the quarter ended December 31, 2013. The finance cost of the company during Q3FY14 was Rs 42.80 crore. The company witnessed a weak financial performance in last couple of quarters. With the help of the fund raised from Torrent Pharma, the company wishes to repay its debt and will try to focus on improving its financials in the upcoming quarters. The enterprise value of the company is Rs 1103.59 crore.
Meanwhile, the share of Elder Pharma also went up by 12% to Rs 257 on BSE.
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