Piramal pharma shares down 10% on weak operational performance

Piramal Pharma Total number of active equity schemes that held the stock: 8 A sample of active schemes that newly added the stock: Quant Mid Cap, Mahindra Manulife Large Cap Pragati Yojana and Taurus Flexi Cap Fund

The shares of Piramal Pharma Limited opened lower on February 9 after the company reported its Q3FY23 results. At 12:02 pm, the stock was trading 10 percent lower at Rs 88.85 apiece on the NSE.

The company reported a 11 percent year-on-year (YoY) growth in revenue from operations at Rs 1,716 crore, while gross margin contracted 90bps to 64 percent as a result of change in product mix.

The consolidated net loss was reported at Rs 90 crore, which is down 155 percent YoY from Rs 163 crore reported for the corresponding quarter last year.

EBITDA for the quarter stood at Rs 170 crore falling 56 percent YoY while EBITDA margin was at 10 percent reducing 1,500 bps as a result of high operating expenses, including raw material cost, energy prices, wage inflation and marketing cost.

Brokerage firm Motilal Oswal said that the margin was lower than expected in 3QFY23. It had estimated EBITDA and revenue at Rs 1,780 crore and Rs 230 crore, respectively.

Commenting on the performance, Nandini Piramal, Chairperson of Piramal Pharma said, “Based on our recent increase in customer engagements and continued inflows of Request for Proposals (RFPs), we believe that the demand for CDMO services, especially for our differentiated offerings remain strong. We continue to maintain our quality track record with successful US FDA inspection at our Riverview facility.”

“In our complex hospital generic business, the inhalation anaesthesia portfolio is seeing a healthy demand. Further, our India Consumer Healthcare business is delivering growth driven by power brands. Investment in e-commerce channel is also yielding good results,” she added.

The company’s board on February 6 had approved allotment of equity shares worth Rs 1,050 crore by way of rights issue.