Higher capacity utilisation, operating leverage and broad-based demand across CDMO, hospital generics and consumer healthcare are expected to support margins in FY27
Piramal Pharma expects to sustain mid-teen revenue growth in FY27 and deliver a significant improvement in profitability, backed by broad-based demand across its businesses, while prioritising organic expansion over acquisitions, Chairperson Nandini Piramal said.
The company, which reported a strong start to the financial year, with consolidated revenue rising 17 per cent year-on-year to Rs 2,270 crore in the April-June quarter, said operating leverage from higher capacity utilisation and better execution would continue to support margins.
“We enter the quarter with pretty strong momentum,” Piramal told Business Standard in an interview. “As revenues grow faster, Ebitda grows even faster because you get more scale and operating leverage.”
The company posted a 72 per cent jump in Ebitda to Rs 285 crore during the quarter, with the Ebitda margin expanding by 400 basis points to 12.5 per cent from 8.5 per cent a year ago.
For the April-June quarter, Piramal Pharma reported a net loss of Rs 69 crore, compared with a loss of Rs 102 crore a year earlier before exceptional items, reflecting improved operating performance despite higher depreciation and tax expenses.
Piramal said all three businesses — contract development and manufacturing organisation (CDMO), Complex Hospital Generics (CHG) and Consumer Healthcare — delivered mid- to high-teen growth during the quarter.
“Our guidance remains mid-teen revenue growth for the year, with Ebitda growing faster than revenue and a significant improvement in profit after tax,” she said.
The CDMO business, which accounts for more than half of the company’s revenue, grew 19 per cent to Rs 1,187 crore. Piramal attributed the performance to improved biopharma funding, broad-based growth across India and overseas operations, and stronger commercial execution following the expansion of the business development team.
“The majority of our customers are US biotechs. Biopharma funding in the US has been doing well since around October, and we see the demand environment remaining favourable,” she said.
While demand has strengthened, customer decision-making timelines continue to remain prolonged, she added.
On the company’s capabilities in newer modalities such as antibody-drug conjugates (ADCs) and peptides, Piramal said growth had been broad-based rather than concentrated in any one segment.
The company recently commissioned a commercial-scale payload-linker suite at its Riverview facility in the US and remains on track with its sterile injectable capacity expansion at Lexington, which is expected to come on stream in late 2027.
In peptides, Piramal said the company was focusing on contract manufacturing rather than pursuing large-scale GLP-1 opportunities.
“Our focus is on contract manufacturing for peptides. We don’t currently have the scale to undertake some of the large-scale GLP work,” she said, adding that the company’s Navi Mumbai peptide facility was witnessing healthy demand for niche peptide molecules.
Despite improving profitability, Piramal said the company was not actively pursuing acquisitions.
“Right now, the focus is on organic growth and greenfield expansion,” she said.
In the Complex Hospital Generics business, Piramal said commercial supplies of Kenalog were expected to begin from the second quarter of FY27 as regulatory approvals transitioned across markets.
On the US generics market, she said pricing pressure continued to persist, but the company had been able to protect market share and margins.
“Overall, in generics, prices only move in one direction. But we are managing to maintain market share and margins,” she said.
Commenting on potential tariff-related risks following recent announcements by US President Donald Trump, Piramal said the company’s largest products were largely insulated because both the active pharmaceutical ingredients (APIs) and finished dosage forms were manufactured in the US, although some raw material inputs continued to come from India and China.
