Buy Piramal Pharma; target of Rs 265: ICICI Securities

buy

ICICI Securities research report on Piramal Pharma

Piramal Pharma’s (Piramal) Q1FY26 result was below our expectations. Performance was impacted due to lack of revenue from a large innovative CDMO (-5.7% YoY) molecule and delay in shipment timing in CHG business (grew 1%). Impact of seasonality and de-operating leverage squeezed EBITDA margin to 5.5% (down 500bps YoY). However, management has maintained its mid-single digit growth guidance with mid-teen margin for FY26. Better utilisation at overseas facilities has improved the operating performance of subsidiary, and margins are expected to recover in H2FY26 as growth across CDMO and CHG biz picks up.

Outlook

Cut FY26/27E EBITDA by ~11%/6% to factor in the slowdown in CDMO business. Retain BUY with a lower TP of INR 265 (INR 280 earlier).

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Piramal Pharma - 29072025 - icici