Piramal OTC aims to double turnover to Rs 1,000 cr in three years

PEL's Pharma and financial services arms demerger is expected to be completed over next 3 quarters

The Nandini Piramal-led over-the-counter (OTC) healthcare business of Piramal Enterprises is not only aiming to double its turnover to Rs 1,000 crore in three years, but now aims to focus more on building a consumer pull for its brands.

Last month Piramal Enterprises (PEL) said that it would demerge its pharma and financial services arm. The demerger is expected to be completed over the next three quarters.

Piramal Pharma, however, draws only 15 per cent of its Rs 5,776 crore revenues from the India business, and bulk comes from North America.

Piramal’s pharma business comprises a contract development and manufacturing (CDMO) business (among the top three in India); a complex hospitals generics business; India consumer healthcare business; and also a joint venture with Allergan in the ophthalmology space. Of this, the CDMO business contributes 62 per cent of the pharma revenues, while 29 per cent comes from hospital generics business, and about nine per cent comes from India consumer healthcare.

Piramal Pharma is trying to grow its India consumer health business and double the turnover to Rs 1,000 crore in the next three years or so, says Nandini Piramal, executive director of PEL and head of the OTC business.

She feels that it is time to shift the business model from a distribution led business to a consumer led business.

“For the last eight years we have focused on building our distribution network, and now we want to focus on building a consumer pull for our brands. We have to compare ourselves with other consumer brands who are spending extensively on branding and marketing. We have now decided that we will spend roughly around Rs 100 crore a year on such marketing activities,” Piramal tells Business Standard.

As such Piramal’s India Consumer healthcare revenues have clocked a CAGR of 15 per cent over the last 10 years, from Rs 127 crore in FY11 to Rs 501 crore in FY21.

Piramal reasons that their early entry into e-commerce has given them an advantage. “We draw around 20 percent of our revenues from e-commerce platforms. We are present across 19-20 platforms. During the pandemic, consumer preference to buy online increased, and we could take advantage of that,” she says.

As for investing in marketing, Piramal says that they have roped in several brand endorsers including actors Kareena Kapoor Khan and Saif Ali Khan, Manoj Bajpayee, Kajal Aggarwal, apart from former cricketer Sourav Ganguly. Piramal has roped in advertising agency BBDO to handle its campaigns.

Gastroenterological products tend to do well in the eastern markets, and Piramal’s Polycrol brand of antacid syrups is being promoted by Ganguly. Similarly, Aggarwal is the face of Lacto Calamine, a skincare brand.

Piramal’s marquee OTC brands include Saridon, Lacto Calamine, I-Pill, Supradyn, Polycrol, Tetmosol across categories such as Analgesics, Gastro- Intestinal, Skin care, Vitamins and supplements, Women care and Baby care. It expanded Covid-care range over the last 12 months and launched sanitisers, disinfectant sprays and wipes, face masks and pulse oximeters.

Piramal says that they have launched 20 new products and 40 new SKUs since March 2020. Overall, Piramal’s consumer business has 21 brands and their product extensions.

Piramal is bullish on the baby care and toys brand Littles for which they have roped in the Khan couple as endorsers.

• The health-focused branded consumer segment in India has a market size of around $ 19 bn

• Piramal has portfolio of 21 brands

• Five major brands contribute for over 60% of the revenue

• Direct reach to 250,000 outlets in India; field force of 1,200 people

• Achieved sales of Rs 501 crore in FY21 - 20% growth over previous year

• Ranks 11th in OTC segment in India

• Targets to double turnover to Rs 1000 crore in 3 years