Broker’s Call: Piramal Pharma (Buy)

Target: 114 rupees

CMP: INR 72.42

In the third quarter and the first nine months of fiscal ’23, the company achieved significant revenue growth of 11% (YoY). In addition, the Hospitals generics division showed growth of 6% in the quarter and 9% for the nine months.

During 9 months of fiscal ’23, the company launched 21 new products, resulting in the introduction of 25 new stock-keeping units (SKUs). These products have contributed about 17 percent of total consumer business sales over the past two years. To enhance its product range, the company focuses on incorporating innovative offerings and improving its production capacity to its fullest potential.

The CDMO business is seeing strong inflows of Requests for Proposal (RFPs), while there is relatively less demand for its existing generic vitamin portfolio and API. Furthermore, the company is strategically focused on expanding its pipeline of injectable products, and currently has 34 SKUs in development.

The company aims to achieve debt-free status by the second quarter of fiscal 2020 with a focus on reviving demand for underperforming plants in the US and UK. Expansion into alternative distribution channels, such as e-commerce, modern commerce and the company’s own website, is being sought.