Pharmaceutical firm Piramal Pharma eyes to double revenue to $2 bn by FY30

Eyeing tripling of Ebitda and bringing down net debt during the same period

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Pharmaceutical firm Piramal Pharma is eyeing to double its revenue to $2 billion by 2029-30, company Chairperson Nandini Piramal said on Wednesday.

At the same time, the earnings before interest, depreciation, and amortisation (Ebitda) would triple and the company aims to bring down its net debt to Ebitda levels to 1x by FY30 from the current 2.9x.

Piramal Pharma stock ended day’s trade at Rs 227 apiece on BSE, up 4.75 per cent, after going up by 9 per cent in intraday trade.

Piramal told reporters that they aim to become a $1.2 bn contract development and manufacturing (CDMO) company with 25 per cent Ebitda margin by FY30. At the same time, the critical care business vertical is eyeing a topline of $600 mn with 25 per cent Ebitda margin by FY30, and the consumer healthcare business would touch a turnover of $200 mn by then with double digit Ebitda margins.

She also clarified that they would not be raising funds through the equity route, but they would fund expansions and investments through a mix of debt and internal accruals.

At the moment, Piramal Pharma has a 17 per cent Ebitda margin and net debt of Rs 4,000 crore as of 2023-24.

Piramal said that over the next five years, the company aims to double its CDMO revenues growing at twice the market rate of 6-7 per cent driven by differentiated offerings, cross-selling as well as integrated services. The CDMO business now contributes 58 per cent to Piramal Pharma’s topline, while 12 per cent comes from India consumer health business, and 32 per cent comes from the complex hospital generics business.

The US Biosecure Act is likely to boost the CDMO business further. If finally approved by the US Senate, the Act would restrict US federal agencies from procuring equipment and services from ‘certain biotechnology companies of concern’, primarily large Chinese pharma companies. Piramal said that they have seen a surge in request for proposal (RFPs) from several clients since March this year, but this transition away from Chinese sourcing would be phased over 8 years.

Therefore, it is early to comment on the quantum boost the CDMO business would get as a result, she said, adding that Piramal Pharma hardly has much dependence on China for raw materials. It sources only 12 per cent of its raw materials from Chinese sources. Moreover, having a manufacturing base in the US may also be beneficial for gaining orders.

It now caters to 500 CDMO customers out of whom one-third is big pharma, one-third are emerging biopharma companies, and one-third are generic players.

Piramal said that biotech funding which was going through some downcycle in the last two years, improved this year. However, July and August saw some softening. A diverse client mix would help hedge from biotch funding volatility.

In the complex hospital generics business, where Piramal Pharma is the global leader in inhalation anaesthesia, the company is open for licensing deals as well as co-development deals. The complex hospital generics business has a topline of Rs 2,400 crore now.

India consumer healthcare arm, which has nearly touched Rs 1,000 crore turnover, is growing at a 23 per cent compound annual growth rate (CAGR). Apart from focusing on power brands like Lacto Calamine, Little’s, i-Activ etc, which have grown by 25 per cent CAGR, Piramal Pharma would also focus on expanding its presence through modern trade, kirana stores and e-commerce. “Our goal is to transition from a pharmacy dominant to an omni-channel consumer healthcare company,” it said.

Looking forward

CDMO biz turnover to touch $1.2 bn by FY30

Critical Hospital Generics biz - $600 mn by FY30

Consumer Healthcare biz - $200 mn by FY30