Piramal Pharma, a leading name in the pharmaceutical sector, has reported a steady performance for the third quarter of FY25, showcasing significant growth in revenue and operational efficiency despite challenges in profitability.
A Snapshot of Q3FY25 Financial Results
Piramal Pharma’s net profit stood at Rs 4 crore for the quarter ending December 2024, a decline from the Rs 10 crore recorded during the same period last year. However, the company’s revenue from operations saw a remarkable 13% year-on-year (YoY) growth, reaching Rs 2,204 crore, driven by strong performances across various business segments. The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 6% YoY to Rs 350 crore, although EBITDA margins contracted by 100 basis points, settling at 16% for the quarter. Chairperson Nandini Piramal stated, “FY25 so far has been a steady year for the company with revenue growth of 14% and EBITDA growing at 20%.
Growth Drivers Across Key Business Segments
1. Complex Hospital Generics (CHG)
The Complex Hospital Generics (CHG) segment emerged as a strong performer, registering a 14% YoY revenue growth to Rs 654 crore. This growth was primarily fueled by increased volumes in the inhalation anesthesia portfolio, reflecting the company’s ability to capitalize on growing global demand for critical hospital products.
2. India Consumer Health (ICH) Business
The India Consumer Health segment also displayed robust performance, with revenue growing 10% YoY to Rs 278 crore. This growth was largely attributed to power brands under the company’s portfolio, which saw an impressive 19% revenue surge, reflecting strong brand loyalty and consumer demand.
3. Contract Development and Manufacturing Organization (CDMO)
One of the standout performers for the quarter was the CDMO (Contract Development and Manufacturing Organization) business, which recorded a 13% YoY growth in revenue, reaching Rs 1,278 crore. This was largely driven by continued traction in on-patent commercial manufacturing and the generic active pharmaceutical ingredient (API) business. Nandini Piramal further emphasized the importance of the CDMO segment, noting, “Our CDMO business continues to deliver robust performance with 18% revenue growth along with EBITDA margin improvement in 9MFY25.”
Operational Highlights and Strategic Insights
The company has been leveraging innovation to stay ahead in the highly competitive pharmaceutical industry. According to Piramal, “This performance was largely led by innovation-related work,” particularly in the CDMO segment, which has been instrumental in achieving consistent growth. Piramal Pharma’s strategic focus on volume growth and operational efficiency has yielded positive results, particularly in its inhalation anesthesia portfolio and ICH power brands. Additionally, the company has been strategically allocating resources to high-growth areas, ensuring sustainability in its operational performance despite sector-wide challenges like pricing pressures and regulatory constraints.
Challenges and Outlook for Piramal Pharma
While the revenue and operational growth trajectory remains positive, the decline in net profit indicates margin pressures, possibly due to rising operational costs and fluctuating market dynamics. Looking ahead, the company remains optimistic about sustaining its growth momentum. Piramal Pharma aims to expand its footprint in high-growth markets, leveraging its strong portfolio and commitment to innovation. Nandini Piramal concluded, “The outperformance of our key segments positions us for sustained growth in the coming quarters. By focusing on operational excellence and customer-centric innovation, we aim to deliver consistent value to stakeholders.” Piramal Pharma’s Q3FY25 performance reflects its resilience and strategic agility in navigating a challenging business environment. With strong growth across key segments like CHG, ICH, and CDMO, the company has set the stage for long-term success. However, maintaining profitability amidst rising operational costs remains a critical area of focus as it seeks to enhance shareholder value.
