Piramal Pharma Sees 20% Ebidta Margin In Next Three-Five Years

Piramal Pharma Ltd. listed on the bourses today after its demerger from Piramal Enterprises Ltd. Even as its shares fell as much as 5% during early trade, its management remains confident of the company's future performance.

"While there will be transitory challenges over the next few months as energy prices and inflation continues, but we are confident that as we see sales, we should get more operating leverage. So, in the 3-5 year time frame we should see (Ebidta margins) in the 20s," Nandini Piramal, chairperson at Piramal Pharma, told BQ Prime in an exclusive interview.

The pharma business, which is segmented into contract development and manufacturing, complex hospital generics and Indian consumer healthcare is expected to grow organically at 15% across segments, Piramal said.

She expects Indian consumer healthcare, its smallest segment contributing 11% of total revenues, to grow the fastest on a low base. Accordingly, she expects contribution from the segment to increase slightly.

"However, the highest contribution will continue to be from CDMO followed by hospital generics," she said.

According to Ajay Piramal, chairman of the Piramal Group, demand for their CDMO services globally has gone up, especially post Covid-19 since global players want to shift dependency from one country and are following the China plus one strategy.

In terms of the complex hospital generics segment, there aren't as many competitors due to the complexity of the products, which sets Piramal Pharma apart from other Indian pharma players, he said.

He is hopeful that cost pressures will start easing soon. "We are seeing the supply chain getting better but inflation still continues. Hopefully, it will get better or it will reflect in better pricing (for the products)," he said.

Watch the full interview here: