Piramal Pharma to invest ₹1,000 cr for expansion: Nandini Piramal

“For the second half of the fiscal year, the company plans to deploy around ₹330 crore, focusing on revenue gain, operational excellence, and making the added brownfield capacities more productive,” Piramal added. “And then probably on similar lines, ₹660 crore for the full fiscal year. Our capex (capital expenditure) is not only a mix of maintenance, but also brownfield expansions, as and when the right opportunities appear. And we should see significant margin improvement overall.”

The Mumbai-based pharma company reported a 14% year-on-year (YoY) rise in its revenue from operations in the first half of the current fiscal year. This growth spans across its three operational verticals – contract development and manufacturing organisation (CDMO), complex hospital generics (CHG), and India consumer healthcare (ICH), all of which have reported double-digit growth.

After a challenging previous year, the company is focusing on organic growth and cost control for recovery and turnaround. The company’s consumer healthcare business has been rapidly growing, with its turnover expected to reach ₹1,000 crore from ₹800 crore in the last fiscal. The segment contributes about 15% to the overall revenue and is also expected to turn profitable after breaking even.

PPL is also consolidating its CDMO businesses through acquisitions and partnerships. Investments include Hemmo Pharmaceuticals ( ₹775 crore), a 27.78% stake in Yapan Bio ( ₹101.7 crore), and a joint venture with Allergan. The company emphasizes sustainability, quality manufacturing, and compliance as key differentiators.

India could also be a major gainer of the CDMO transition to the eastern hemisphere in the next two decades. The country is currently the third-largest pharmaceutical producer globally by volume and houses a significant number of FDA, WHO, and EDQM-compliant facilities. 

According to the Indian Brand Equity Foundation (IBEF), India has over 3,000 pharmaceutical companies and more than 10,000 manufacturing plants, with about 500 API producers accounting for 8% of the global output.

Despite facing external challenges like rising interest rates, geopolitical uncertainties, and increased energy costs, PPL continues to expand in its verticals through sustainable growth and is reducing its debt significantly. 

The company recently raised ₹1,050 crore through a rights issue, primarily used for debt repayment. It has managed to cut its net debt by ₹958 crore since March 2023. A portion of this fund has also been allocated for capital expenditure. “And as we continue to expand through internal accruals, we will continue to reduce debt a little more,”  Nandini added.

According to investment banking and capital markets firm Jefferies India, Piramal Pharma is expected to see a substantial compound annual growth rate (CAGR) in its revenue and Ebitda at 13% and 40%, respectively over the fiscal years 2023-2026.

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Published: 08 Dec 2023, 05:20 PM IST