ICICI Securities research report on Piramal Pharma
Piramal Pharma maintained its growth trajectory in Q3FY24 with revenue growing at 14% YoY backed by robust traction across verticals. Higher inventory cost led to a sequential drop of 110bps in gross margins; for the full year, the company expects gross margin to be between 64-65%. Higher revenue contribution from innovative CDMO (50% vs. 45% in FY23), lower RM, energy and advertisement cost coupled with operating leverage will likely drive 538bps expansion in EBITDA margins over FY23-26E. We expect Piramal to register a CAGR of 14.6%/31.4%/255.5% in revenue/EBITDA/PAR over FY23-26E.
Outlook
The stock trades at 16.5x FY25E and 12.8x FY26E EV/EBITDA. We retain our estimates and maintain BUY with an unchanged target price of INR 180.
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