Piramal Pharma stock hits new, soars 25% in 6 days on strong Q2 results

Shares of Piramal Pharma hit a new high at Rs 274.80, soaring 9 per cent on the BSE in Thursday’s intra-day trade amid heavy volumes in an otherwise weak market on healthy outlook. In the past six trading days, the stock of the drug company surged 25 per cent after delivering better-than-expected operational performance for the second quarter of financial year 2024-25 (Q2FY25) fueled by superior traction in the Contract Development and Manufacturing Organization (CDMO) segment.

 

The company posted profit after tax (PAT) of Rs 23 crore for Q2FY25 compared to Rs 5 crore in a year ago quarter. Revenue for the quarter under review grew 17 per cent at Rs 2,242 crore as compared to Rs 1,911 crore in Q2FY24.  The revenue growth was primarily driven by robust growth in CDMO business.

 

 

Earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 28 per cent YoY at Rs 403 crore. The margin improved 200 bps to 18 per cent, driven by operating leverage, cost optimization initiatives and superior revenue mix.

 

To sustain this growth momentum and to capitalize on rising demand for sterile fill-finish capabilities, Piramal Pharma announced a $80 million expansion plan at its Lexington facility which is expected to be completed by end FY27. In Complex Hospital Generics (CHG) business, the company is witnessing steady volume growth in Inhalation Anesthesia products in the US and Emerging Markets. In India Consumer Healthcare (ICH) business, the company said it continues to see a robust growth in power brands and e-commerce sales.

 

Over the long term, the management remains committed to achieving the company’s financial goals of $2 billion revenue with 25 per cent EBITDA margin and 1x net debt / EBITDA by FY30.

 

According to ICICI Securities, CDMO business was driven by order inflows, especially for on-patent commercial manufacturing. The company also witnessed good demand for differentiated offerings with increase in customer enquiries and visits. In ICH business, growth was driven by new launches and 18 per cent growth in power brands. In CHG, the growth was driven by volume growth in inhalation anesthesia portfolio in the US and emerging markets. Overall, the brokerage firm expects CDMO momentum to continue which remains key for the improvement in overall financials.

 

With enhanced inquiries on the CDMO front at industry level in India, Motilal Oswal Financial Services believes Piramal Pharma is well poised to benefit from its differentiated capabilities and capacities. Further, it is increasing its offerings in the CHG segment through an established global network.  At 02:58 pm; Piramal Pharma was trading 5 per cent higher at Rs 265.70, as compared to 0.70 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped two-fold. A combined nearly 40 million equity shares changed hands on the NSE and BSE.