Torrent Pharmaceuticals likely to acquire Unichem Labs, stocks surge

Pharma giant Torrent Pharmaceuticals is set to acquire 73-year old Unichem Laboratories in a deal worth Rs. 3,500 crore, according to news reports. In May 2017, the company had acquired Indian operations of Regestrone and Pregachieve brands from global pharma major Novartis AG.
 
Unichem Laboratories has a strong hold in the domestic market with about 56-57 per cent of its overall sales being sourced from its domestic businesses. The company majorly deals in chronic therapies which ensures a sustained growth in revenue. Furthermore, only 12 per cent of its domestic drugs portfolio fall under the National List of Essential Medicines, which reduces the uncertainties in the domestic market.
 
Unichem Laboratories had posted an 11 per cent growth in its revenues in financial year 2017, on a yearly basis. Whereas, Torrent Pharmaceuticals had posted an 8 per cent growth in its revenue for the corresponding period, on a year-on-year basis.
 
Torrent Pharmaceuticals witnessed a spurt in volume by more than 2.55 times on Friday. The stock hit an intraday high of Rs. 1375.70 per share, higher by nearly 4 per cent on BSE. On the other hand, Unichem Laboratories witnessed a spurt in volume by more than 1.21 times on Friday. The stock also hit an intraday high of Rs. 328.35 per share, up by over 5 per cent on BSE.