Piramal Pharma - Focus On Margin Expansion: Systematix

Systematix Research Report

Piramal Pharma Ltd. which operates in three core segment –

1. contract development manufacturing organisation - 58% of sales,

2. complex hospital generics – 30% of sales and consumer healthcare - 12% of sales expects to deliver 13% plus revenue and 20% plus Ebitda CAGR over FY24 to FY30.

On the capex front, the company will be prudent and ensure the absolute Net Debt (Rs 40,000 million) should broadly remain flat at current levels.

Hence capex for driving the growth will be funded through internal accruals only. Net Debt to Ebitda is expected to consistently decline.

We estimate the guided Ebitda growth should translate to an EPS of about Rs 14-16 per share in FY30 and stock is trading at 15 times on 2030 EPS.

The growth will be strong across years but will accelerate a bit more in later years. The revenue growth guidance does not build benefit from enactment of Biosecure law in the United States.

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