Piramal Pharma: Breaking Through the Pharma Fog

In a world where India’s pharmaceutical sector is constantly shifting, Piramal Pharma is steadily carving its own identity. Demerged from Piramal Enterprises in 2022, the company is now a focused pharmaceutical player with high aspirations. But how well is it performing post-demerger? Is Piramal Pharma really on track to becoming a global leader in CDMO services? Let’s dive deep.

How Did Piramal Pharma Begin Its Journey?

Piramal Pharma was born out of a strategic decision to separate the financial and pharmaceutical arms of Piramal Enterprises. This move, completed in October 2022, allowed Piramal Pharma to independently pursue opportunities in the pharmaceutical space, particularly in high-growth areas such as Contract Development and Manufacturing (CDMO), complex hospital generics, and over-the-counter consumer health products.

Led by Chairperson Nandini Piramal and CEO Peter DeYoung, the company has since expanded its global footprint and strengthened its product pipeline. Listing as an independent entity also allowed the firm to sharpen its capital allocation strategies and enhance visibility among healthcare investors.

What Does Piramal Pharma Do?

Piramal Pharma’s business is broadly divided into three segments:

1. CDMO (Contract Development and Manufacturing Organization)

This is the largest revenue driver. Piramal Pharma partners with pharmaceutical and biotech firms to provide services ranging from drug discovery and development to commercial manufacturing. Its strong presence in North America and Europe makes it a go-to CDMO for many global clients.

2. Complex Hospital Generics (CHG)

This includes a portfolio of injectable and inhalation anesthetics used in hospital settings. The CHG segment continues to benefit from increasing demand in regulated markets, particularly in the US and EU.

3. India Consumer Healthcare (ICH)

This segment focuses on OTC (over-the-counter) products like Saridon, Lacto Calamine, and Polycrol. The ICH division leverages Piramal’s strong brand equity and wide distribution network in India.

What’s New at Piramal Pharma in 2025?

As of April 2025, Piramal Pharma has had several positive developments:

Q4 FY2024 Financials: The company reported an 18% YoY growth in revenue to Rs 2,552 crore. EBITDA grew 48% to Rs 556 crore, and PAT more than doubled to Rs 132 crore.
Strategic Investments: Piramal Pharma is investing $80 million to expand its sterile injectables capacity in Lexington, Kentucky by 2027. This signals a strong commitment to scaling its CDMO business.
Future Targets: Management has stated an ambition to double turnover to $2 billion by FY2030, with a sharp focus on improving EBITDA margins across verticals.
Global Performance: CDMO contributed 58% of total revenues in FY24, growing 18% year-on-year, making it the highest-margin contributor to the company’s bottom line.

These efforts indicate that Piramal Pharma is not just recovering from the post-demerger fog—it is executing a clear, long-term vision.

How Does Piramal Pharma Stack Up Against Peers?

Let’s compare Piramal Pharma’s key financials with other large-cap pharma players:

Company	Market Cap (₹ Cr)	P/E Ratio	P/B Ratio	Dividend Yield (%)
Piramal Pharma	29,483	752.37	3.69	0.05
Sun Pharma	4,17,844	35.4	6.11	0.77
Lupin	93,502	32.5	6.15	0.40
Dr. Reddy’s Labs	97,640	18.3	3.44	0.68
Cipla	1,23,218	29.6	4.55	0.86

Source: Screener.in and Moneycontrol (as of April 22, 2025)

As evident, Piramal Pharma trades at a very high P/E multiple. While this reflects investor optimism about future earnings, it also suggests that much of the good news might already be priced in.

What Are Analysts Saying?

Brokerages like HDFC Securities, ICICI Direct, and Motilal Oswal have a positive long-term outlook on Piramal Pharma. The company has received a consensus ‘Strong Buy’ rating. The average target price currently stands at Rs 249.50, suggesting a potential upside of around 13% from its current levels.

Analysts particularly appreciate the company’s:

Growth trajectory in the CDMO business
Strategic capex to expand injectables capacity
High potential of India’s OTC market under ICH

That said, concerns persist about the lofty valuation and pressure on margin expansion in a competitive CDMO space.

Key Strengths of Piramal Pharma

Global CDMO Capabilities: Facilities in India, North America, and Europe serving over 100 countries.
Regulatory Approvals: Facilities approved by USFDA, MHRA, and other global regulators.

Strong Parentage: Backed by the Piramal Group, bringing credibility and governance experience.
Diversified Portfolio: Balanced mix of B2B and B2C offerings through CDMO, CHG, and ICH.

What Are the Risks?

While Piramal Pharma’s growth story looks promising, it is not without its risks:

Valuation Risk: With a P/E ratio exceeding 750, expectations are sky-high.
Regulatory Risk: Dependence on USFDA and EMA approvals for CDMO products.
Execution Risk: Scaling CDMO capacity in a globally competitive space isn’t easy.
Currency Exposure: A large part of revenues comes from exports, leaving the company vulnerable to forex volatility.

The Road Ahead: What’s Next for Piramal Pharma?

Looking forward, the management has laid out a structured vision:

Double turnover to $2 billion by 2030
Expand margins in CDMO and CHG
Increase India OTC market share
Execute new capex programs efficiently

If executed well, these steps could position Piramal Pharma as a leading integrated pharma and healthcare player over the next decade.

Final Thoughts

Piramal Pharma has made a solid start post its demerger, with a clear strategy centered around CDMO scale-up, consumer health brand growth, and geographic diversification. Its recent earnings performance shows operating leverage is beginning to play out.

That said, the high valuation and execution intensity required in CDMO space should not be overlooked. For investors tracking India’s evolving pharma ecosystem, Piramal Pharma remains a company worth watching closely.

Disclaimer: This blog is intended for informational purposes only and should not be construed as investment advice. Investors are advised to conduct their own due diligence or consult a financial advisor before making any investment decisions.

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