Company Update : Piramal Pharma Ltd By Motilal Oswal Financial Services Ltd
Result in line; higher other income drives profitability
* PIRPHARM’s revenues grew 12.5% YoY to INR22.0b (our est: INR20.7b) for the quarter.
* CDMO segment’s (58% of total sales) revenue grew 13% YoY to INR12.8b, driven by continued traction in the on-patent commercial manufacturing and generic API business.
* Complex hospital generics segment’s (CHG; 30% of total sales) revenue grew 14% YoY to INR6.5b, driven by healthy volumes in the Inhalation Anesthesia business.
* The India consumer healthcare segment’s (ICH; 13% of total sales) revenue grew 10% YoY to INR2.8b, driven by strong growth in power brands.
* Gross margin contracted 210bp YoY to 63.4% due to a change in the product mix.
* However, EBITDA margin expanded 160bp YoY to 15.3% (our est: 11.0%), largely due to a decrease in employee costs/other expenses (down 150/220bp as a % of sales).
* EBITDA grew 25.8% YoY to INR3.4b (our est: INR2.3b), supported by operating leverage, cost optimization initiatives, and a superior revenue mix.
* Adj Profit contracted 89.5% YoY to INR37m (our est: 108m) for the quarter, owing to the high tax burden (94% of PBT in 3QFY25 vs 48% of PBT in 3QFY24).
* In 9MFY25, Revenue/EBITDA grew 14%/33% YoY to INR64b/INR8.8b, while Adj loss for 9MFY25 grew 7% YoY to INR625m.
Other highlights
* CDMO:
* Biotech funding has improved over the previous years but remains uneven across months.
* It continues to witness a steady order inflow momentum, particularly for onpatent commercial manufacturing.
* Healthy demand was observed in the generic API business.
* Timely capacity expansions and targeted business development efforts are generating more customer inquiries, though decision-making is prolonged.
* The company has successfully cleared 24 regulatory inspections and 142 customer audits in 9MFY25.
* CHG:
* Good volume growth was observed in the inhalation anesthesia portfolio in the US, driven by order wins for Sevoflurane and Isoflurane.
* Capacity expansion at Dahej and Digwal is underway to capture growth opportunities in the RoW markets.
* The company continues to command a leading position in Baclofen in the US market.
* It is investing in Differentiated and Specialty Products, including 505(b)(2) applications, complex generics, differentiated generics, and branded products, to enable long-term growth.
* ICH:
* Power Brand grew 19% YoY in 9MFY25 and contributed to 48% of ICH sales.
* E-commerce sales grew over 40% YoY in 3QFY25 and contributed 20% to the ICH business vs 16% in 3QFY24.
* 16 new products and 23 new SKUs were launched during 9MFY25.
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