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ICICI Securities Report
Piramal Pharma Ltd. Q1 FY25 result was driven by better traction in innovative contract development and manufacturing organization portfolio (50% of CDMO sales). Q1 is a seasonally weak quarter due to which its margins (10.5% in Q1 FY25 versus 20.8% in Q4 FY24) are volatile.
It will focus on CDMO business to improve utilisation of existing sites and add more molecules in pipeline. Complex health generics performance was tepid (up 2.3% YoY) in Q1; the company is adding capacities in India to drive cost efficiencies and boost growth.
Capex ($85-90 million in FY25) for new capacities may restrict its ability to generate free cashflow and repay debt in near future. Management maintains guidance of 14-15% growth in revenue and Ebitda in FY25; better order inflow of commercial innovative CDMO molecules may surprise positively.
Maintain 'Buy' raise target price to Rs 200.
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