The global pharmaceutical industry, valued at over $1.2 trillion in 2020, plays a crucial role in healthcare by developing, manufacturing, and distributing medications. With an annual growth rate of around 5.8%, this industry drives innovation, supports public health, and contributes significantly to the global economy.
With a market capitalization of Rs 20,807.62 crore, the shares of Piramal Pharma Ltd were trading at Rs 156.85 per share, increasing around 0.38 percent as compared to the previous closing price of Rs 156.25 apiece.
Examining the financial performance of the company, revenue increased by 15 percent from Rs 2,164 crore in Q4FY23 to Rs 2,552 crore in Q4FY24. During the same period, net profit increased by 102 percent, from Rs 50 crore to Rs 101 crore.
ICICI Direct, one of the well-known brokerages in India, gave a ‘Buy’ call on the pharma stock with a target price of Rs 210 apiece, indicating a potential upside of 34 percent from Wednesday’s price of Rs 156.85 per share.
Here is the reason behind the bullish potential upside target:
● The company’s CDMO growth has been driven by focusing on high-value services, including catering to innovators, offering differentiated services like high potency APIs, ADCs, and peptides, and leveraging a global manufacturing network for integrated services. These high-value services are considered to be margin-accretive and stickier in nature.
● The improved performance in FY24 was attributed to the CDMO business, which saw significant growth due to advancements in the aforementioned high-value services. This strategic focus on innovative and differentiated offerings has strengthened the company’s market position and financial outcomes.
● The company has gained significant bandwidth via acquisitions and the building up of knowledge over the years. PPl has a reach of over 6,000 hospital and surgical centers across 100 countries. The company’s developmental pipeline remains strong with an addressable market of $ 2 billion.
● The company aims to improve margins and reduce balance sheet stress by streamlining operating leverage through optimal utilization of foreign assets and enhancing its product mix by focusing on innovative CDMO services. These priorities are expected to boost financial performance and alleviate balance sheet pressure significantly.
Piramal has 17 development and production sites, with end-to-end capabilities and a global distribution network spanning over 100 countries.
Eleven of these 17 institutions are located in India, five in the United States, two in the United Kingdom, and one in Canada. Plants in Lexington, Riverview, Aurora, Sellersville, Bethlehem, Morpeth, Grangemouth, Pithampur, Turbhe, Mahad, and Digwal have received FDA approval.
Piramal Pharma Limited is an India-based pharmaceutical company, which offers a portfolio of differentiated pharma products across a domestic and global distribution network. The Company has approximately 17 global facilities and a global distribution network in over 100 countries.
Written by:- Abhishek Singh
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