Target: ₹276
Current Market Price (CMP): ₹195.20
Piramal Pharma’s Contract Research, Development, and Manufacturing Organization (CDMO) segment offers services ranging from discovery to clinical and commercial supply, focusing on antibody-drug conjugates (ADCs), highly potent active pharmaceutical ingredients (HPAPIs), peptides, and sterile injectables. A thorough analysis of the company’s leading molecules, peer comparisons, and key modalities reveals that while the platform benefits from both scope and geographical proximity, its growth remains susceptible to fluctuations in biotech funding and approval timelines, as well as regulatory outcomes across multiple jurisdictions. Additionally, there is a risk of underutilization if capital expenditures in the US or UK do not proceed as planned, potentially compressing Returns on Capital Employed (RoCE) despite the strategic rationale for the expansion.
The Company’s Complex Hospital Generics (CHG) segment offers consistent margins that exceed those of the sector and is characterized by stable cash flows, backed primarily by inhalation anesthetics such as Sevoflurane and specialized injectables. Meanwhile, the Piramal Consumer Health (PCH) division—which includes brands like Littles, Polycrol, Lacto Calamine, Tetmosol, and i-pill—leverages brand recognition and distribution networks to generate steady cash flows. This segment provides avenues for premiumization and expansion into digital and over-the-counter markets, serving to mitigate the inherent volatility of the CDMO cycle.
Coverage on Piramal Pharma has been initiated with an “Add” rating and a target price set at ₹276. This valuation is derived by applying a 24.6x EV/EBITDA multiple, which reflects the median of peer projections for Fiscal Year 2027 EBITDA, to the anticipated EBITDA of ₹1,749 crore, after adjusting for a net debt of ₹4,625 crore.
Published on September 25, 2025.
