Buy Piramal Pharma; target of Rs 270: Motilal Oswal

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • Piramal Pharma's CDMO segment is expected to drive growth, with a 20% CAGR over FY26-28, supported by healthy RFP activity, a growing development pipeline, and increasing contribution from on-patent manufacturing and differentiated offerings.
  • The company's CHG segment is expected to grow at a 17% CAGR over FY26-28, driven by the Kenalog integration, continued leadership in US inhalation anesthesia, and increasing penetration in ex-US markets.
  • ICH revenue is expected to decline at a 8% CAGR over FY26-28, due to the expiry of the Bayer distribution agreement.

Thesis Validation Checklist

  • Investors should watch for continued growth in CDMO and CHG segments, driven by robust order inflows and improved execution.
  • The company's ability to maintain its leadership position in key hospital-based therapies and expand its portfolio of complex generics and specialty products will be crucial.
  • Any potential disruptions to the supply chain or regulatory issues could impact the company's growth prospects.
  • Investors should also monitor the company's progress in expanding its capabilities, including the Lexington expansion and the acquisition of a controlling stake in Yapan Bio.