Piramal Pharma shares jump 9% on growth plans; brokerages see more upside potential

Shares of Piramal Pharma Ltd surged 8.61 per cent in Wednesday's trade to hit a high of Rs 235.35. The stock was last seen trading 4.13 per cent higher at Rs 225.65. At this price, it has gained 62.87 per cent on a year-to-date (YTD) basis.

The company highlighted its ambitious growth plans and aims to achieve a revenue of $2 billion by CY30, said Antique Stock Broking. "Piramal Pharma believes its CDMO segment would be the key catalyst for growth driven by its ADC platform. Besides this, the company also believes its complex hospitals portfolio and India consumer health are likely to grow at 12 per cent and 9 per cent CAGR, respectively. Enhanced productivity and cost optimisation initiatives are likely to drive its EBITDA margin expansion to ~25 per cent from the current ~15 per cent," the brokerage stated.

MOFSL has maintained its 'Buy' call on Piramal Pharma with a target price of Rs 260. "The company can grow this business by adding more products, expanding into new markets and gaining market share in the existing markets. A focused approach to power brands and an enhanced distribution network should drive better profitability for its India consumer health (ICH) segment. We maintain our 'Buy' rating with a TP of Rs 260, based on SOTP (17x EV/EBITDA for CDMO business; 13x EV/EBITDA for CHG and India consumer health business)," MOFSL mentioned.

ICICI Securities has assigned a target of Rs 245 for Piramal Pharma. "CHG business is likely to grow at a steady pace of ~13 per cent over FY24–30E with stable margins of 25 per cent; consumer health business' focus is to improve scale (revenue CAGR of 9 per cent) and achieve double-digit margins by curbing marketing/other overhead cost. We lower our rating to 'Add', and raise TP to Rs 245," the domestic brokerage said.

The stock saw high trading volume on BSE as around 5.02 crore shares changed hands at the time of writing this story. The figure was way more than the two-week average volume of 9.87 lakh shares. Turnover on the counter came at Rs 180.89 crore, commanding a market capitalisation (m-cap) of Rs 6,111.77 crore.

As of June 2024, promoters held a 34.95 per cent stake in the company.