Piramal Pharma expects a muted FY26 due to uncertainties around the revival of biotech funding and customers in wait-and-watch mode on outsourcing work following uncertainty around tariffs, chairperson Nandini Piramal has said.
In an interview to Moneycontrol on May 15, Piramal struck a cautious tone for FY26 but was optimistic about the years ahead.
“It will be a muted year,” she said, citing macroeconomic uncertainty, uneven biotech funding and pricing pressures. The company expects single-digit revenue growth and a slight dip in the EBITDA margin.
“Customers (in CDMO segment) are scenario planning, but not committing until absolutely necessary,” she said, referring to the slow conversion of requests for proposals (RFPs) into contracts.
In FY25, the contract development and manufacturing organisation (CDMO) segment contributed almost 60 percent to Piramal Pharma’s revenue of Rs 9,151 crore.
Piramal, however, reaffirmed the company’s FY30 goals, which include $2 billion in revenue, a 25 percent EBITDA margin, and net debt to EBITDA below 1x.
“We’re confident about FY30. FY27 should see a significant recovery,” she said.
EBITDA is short for earnings before interest, taxes, depreciation and amortisation.
“FY25 has been a good year of recovery,” Piramal said, highlighting a 12 percent year-on-year revenue growth that pushed the company past the $1-billion mark.
The EBITDA margin held steady at 17 percent, while net profit swung from a Rs 190 crore loss in FY23 to a Rs 91 crore profit in FY25. “We’ve also brought down our net debt to EBITDA from 5.6x to 2.7x,” she added.
CDMO: Innovation-led growth
The CDMO segment remains the growth engine, contributing Rs 5,447 crore to FY25 revenue, up 15 percent from the previous year.
Fifty-four percent of CDMO revenues now stem from innovation-related work, up from 50 percent in FY24, driven by on-patent commercial manufacturing, which surged more than 50 percent to $179 million.
“This shift toward differentiated offerings and on-patent work is translating into better utilisation and operating leverage,” Piramal said.
She said the segment’s EBITDA margin improved due to procurement efficiencies and operational excellence.
One bright spot is the company’s antibody drug conjugates (ADC) portfolio, with integrated capabilities across sites in Japan, the US, and the UK. “We’re seeing strong demand here,” Piramal said.
ADCs are targeted cancer therapies that combine a monoclonal antibody and a chemotherapy drug. They are designed to target cancer cells, deliver the drug directly to the tumour site, reducing damage to healthy cells.
Power brands shine
The company’s India consumer healthcare (ICH) segment crossed the Rs 1,000-crore revenue milestone in FY25, with power brands growing 20 percent YoY and accounting for nearly half of the sales.
“We’ve invested in media, launched 21 new products and 31 SKUs (stock-keeping units) and expanded distribution,” Piramal said. E-commerce sales grew 39 percent YoY and now account for 21 percent of ICH revenue.
In the complex hospital generics (CHG) segment, Piramal maintained its number 1 position in the US for sevoflurane (44 percent market share) and baclofen (75 percent).
A new unit in Telangana’s Digwal began commercial production in March, aimed at capturing a share of the $400 million for the sevoflurane market in rest-of-the-world markets.
Sevoflurane is an anaesthetic, while baclofen is used to treat pain and muscle stiffness and tightness from multiple sclerosis and spinal cord injuries.
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