Shares of Unichem Laboratories jumped to a record high on strong profit and Torrent Pharma deal.

Shares of Unichem Laboratories jumped as much as 11.8 per cent to a record high of Rs 350.25, while Torrent Pharmaceuticals Ltd rose as much as 3.9 per cent to Rs 1,365.45.

Ahmedabad-based Torrent Pharmaceuticals Ltd has agreed to acquire the India and Nepal businesses of Mumbai-based Unichem Laboratories Ltd for about ₹3,600 crore. The deal is among the largest transactions in the domestic pharmaceutical landscape.

This is Torrent Pharma's second big-ticket acquisition in about four years, the last being its over ₹2,000-crore buy of Elder Pharma's India and Nepal businesses in December 2013.

Acquisition of Unichem's Indian business strengthens Torrent's position in existing therapies and provides entry into the OTC space, CLSA says.

Torrent Pharma had on Friday posted a 1 per cent dip in net profit at ₹204 crore for the quarter ended September 2017 as against ₹207 crore reported in the corresponding quarter a year ago. The company's revenues for the quarter stood at ₹1,429 crore.

Unichem Laboratories posted a two-fold jump in net profit to Rs 45.8 crore in the second quarter ended September helped by improved sales in domestic formulation and US generics business.

The company reported a profit of Rs 20.5 crore in the same period of the previous year. Revenue from operations grew 16.3 percent to Rs 428 crore against Rs 364.2 crore in the year ago period.

Torrent's Indian growth was strong but US, Brazil were weak in the quarter, CLSA says.

CLSA has retained “buy” rating on Torrent Pharma, but has cut the price target to Rs 1,640 from Rs 1,660after lowering FY18-20 EPS by 6 pct to 7 pct due to lower US and Brazil sales.

(With inputs from Reuters)

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