IGI Logo

Revenue and EBITDA Growth Beats Estimates

Revenue grew by 12.5% YoY and declined 1.7% QoQ to INR 22.0 Bn (vs. consensus estimates at INR 21.3 Bn).

* EBITDA grew 25.8% YoY and declined 1.1% QoQ to INR 3.4 Bn, with margins expanding 162 bps YoY and flat sequentially at 15.3%. (vs. consensus estimates at 13.7%)

* Adj. PAT declined significantly by 86.4% YoY and 83.7% QoQ to INR 37 Mn (vs. consensus estimates at INR 0.1 Bn), due to a jump in tax expenses.

Piramal Poised for Growth Across Its Diverse Portfolio

Piramal aims to more than double its revenues to USD 2 Bn by FY30 with an EBITDA margin of 25%, driven by strong growth across its key segments:

* CDMO (Contract Development and Manufacturing Organization): Currently contributing ~58% to total revenue, management expects this segment to contribute 60% by FY30. We expect growth to be driven by the company's focus on an innovation-driven CDMO model and an increase in the generic API business. We anticipate this segment will grow at a CAGR of 13% from FY25-30.

* CHG (Complex Hospital Generics): Currently contributing ~30% to total revenue, management expects this contribution to remain stable going forward. We expect the company to continue benefiting from its inhalation anesthesia portfolio, including products like Sevoflurane and Baclofen, along with new specialty product launches. We foresee this segment growing at a CAGR of 14% from FY25-30.

* ICH (India Consumer Healthcare): Currently contributing ~12% to total revenue, the share from ICH is expected to decline to 10% by FY30 as the company shifts focus towards CHG. Despite this, we expect growth to continue through the power brands portfolio, new product launches, and an increase in revenue share from e-commerce. We expect this segment to grow at a CAGR of 9% from FY25-30.

View and Valuation: We have slightly revised our FY26/27 EPS estimates upward by 1.3%/0.6% and maintained our ‘BUY’ rating with a target price of INR 315, valuing the company on an SOTP basis with an EV/EBITDA of 15x for CDMO+CHG, 7x for ICH, and 10x for profit from the Allergan JV. We expect CDMO to remain the major revenue driver, with all three segments continuing their growth trajectory. We believe the 25% EBITDA margin guidance by FY30 is a bit far-fetched without operational leverage kicking in in the coming quarters, but further upside remains possible if efficiencies materialize.

For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131