Piramal Pharma flags early recovery signs in CDMO demand as Q3 loss widens

Piramal Pharma on Thursday said it is seeing early signs of recovery in demand for its contract development and manufacturing organisation (CDMO) business, even as the segment continued to face pressure from inventory destocking and slower early-stage order inflows during the ongoing financial year.

 

Speaking to the media after the results for the third quarter of 2025-26 (Q3FY26), Piramal Pharma Chairperson Nandini Piramal said there has been a pickup in requests for proposals (RFPs), alongside improving biopharma funding conditions in the US. However, she cautioned that the conversion of RFPs into firm orders typically takes time. “These are early signs of recovery. RFPs are up, but the translation into orders will take about six months,” she said, reaffirming the company’s FY26 guidance of mid-single-digit revenue growth and Ebitda (earnings before interest, taxes, depreciation, and amortisation) margins in the high-teens range.

 

This comes at a time when Piramal Pharma reported a net loss of ₹136 crore in Q3FY26 on a consolidated basis, compared to a profit of ₹3.6 crore in the year-ago period. Revenue from operations also declined by 3 per cent to ₹2,139.8 crore, from ₹2,204 crore in Q3FY25. Piramal Pharma announced the results late at night on Wednesday. On Thursday, the company’s stock fell by 0.39 per cent, ending the day’s trade at ₹153.65 apiece on the BSE.

 

The company attributed the weaker performance largely to continued inventory destocking in one of its large on-patent commercial products, affecting its CDMO business. In Q3, revenue from its CDMO business fell 9 per cent year-on-year (Y-o-Y) to ₹1,166 crore.

 

Nandini described the year as “muted” for CDMO. However, she termed improving US biotech funding, mergers and acquisitions (M&As), and initial public offering (IPO) activity as positive indicators for medium-term demand. She added that Piramal Pharma is seeing higher RFP activity, especially for its North American facilities with differentiated capabilities.

 

Despite the Y-o-Y pressure, Nandini said the company expects sequential improvement in Q4FY26, which has historically been its strongest quarter, though comparisons with last year may remain challenging due to a strong base.

 

Alongside the operating update, the company announced a $35 million all-cash acquisition of the branded injectable Kenalog from Bristol Myers Squibb. The acquisition includes potential milestone-based payouts and is expected to generate $30 million-40 million in annualised sales, with margins comparable to Piramal Pharma’s consumer health-care portfolio. The complexity of manufacturing limits competition and complements the company’s existing portfolio, Nandini said.

 

The consumer healthcare business grew 20 per cent Y-o-Y in Q3FY26, supported by 13 new product launches and strong traction in power brands such as Littles and Lacto Calamine. Power brands posted 30 per cent growth during the quarter.