Buy Piramal Pharma, target price Rs 300: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Piramal Pharma with a target price of Rs 300. The current market price of Piramal Pharma Ltd. is Rs 233.4. Piramal Pharma, incorporated in 2020, is a Small Cap company with a market cap of Rs 30903.19 crore, operating in the Pharmaceuticals sector.

Piramal Pharma's key products/revenue segments include Pharmaceuticals, Sale of services, Scrap and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 2216.35 crore, down -3.76% from last quarter Total Income of Rs 2302.86 crore and up 9.72% from last year same quarter Total Income of Rs 2020.08 crore. The company has reported net profit after tax of Rs -13.37 crore in latest quarter.

The company's top management includes Mrs.Nandini Piramal, Mr.Vivek Valsaraj, Mr.Peter DeYoung, Mr.Neeraj Bharadwaj, Ms.Vibha Paul Rishi, Mr.Jairaj Purandare, Mr.Peter Stevenson, Mr.S Ramadorai, Mr.Sridhar Gorthi. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2024, the company has a total of 133 Crore shares outstanding.

Investment Rationale
Motilal Oswal Financial Services raised its EBITDA estimates by 3%/4%/4% for FY25/FY26/FY27 (considering superior execution in CDMO/CHG segment) but reduced the earnings estimate by 68%/53%/43% (considering higher effective tax rate). The brokerage continues to value Piramal Pharma on a SOTP basis (19x EV/EBITDA for CDMO business, 12x EV/EBITDA for CHG business and 13x EV/EBITDA for consumer health (ICH) business) to arrive at a target price of Rs 300.

Promoter/FII Holdings
Promoters held 34.95 per cent stake in the company as of 31-Dec-2024, while FIIs owned 31.68 per cent, DIIs 14.09 per cent.