Piramal Pharma open to partnerships in OTC; eyes further debt reduction

Piramal Pharma is open to partnerships in the over-the-counter (OTC) space in India as it charts out plans for organic growth and debt reduction.
The company has been consistently reducing its debt levels, which at the end of 2023-24 (FY24) stood at Rs 3,932 crore against Rs 4,781 crore a year ago. It paid off Rs 958 crore in debt after a successful rights issue last year.

“We expect to post early teens revenue and Ebitda growth this year, and since the absolute figure of debt would not increase, we expect to pay off some debt by the end of this year (2023-24),” Piramal Pharma chairperson Nandini Piramal told Business Standard.

She said Piramal Pharma had not set any number to achieve in terms of debt reduction but is comfortable with a net debt-Ebitda ratio between 2X to 3X. The net debt-Ebitda ratio was around 5.6X at the beginning of FY24, and now is at 2.9X.
Piramal said they were focussing on organic growth across all verticals – OTC business in India, complex hospital generics and the Contract Development and Manufacturing (CDMO) business.
“We touched close to Rs 1000 crore revenue from the OTC vertical in FY24 and we hope to grow in double digits this year too. We may look at acquisitions if something fits, and we are also open to partnerships. But, our primary target is to achieve scale and profitability,” Piramal explained.
Piramal Pharma’s spending on brand promotion and marketing came down to 13 per cent of the India consumer health (ICH) sales in FY24 against 15 per cent in the previous year.

Its power brands Lacto Calamine, i-pill, i-know range of products, Little’s, Polycrol, among others, contributed to 42 per cent of total ICH sales in FY24. E-commerce sales grew at over 36 per cent year-on-year (Y-o-Y) in FY24 and contributed 20 per cent to ICH revenues.
The company is also vertically integrating its production of the inhalation anesthesia (IA) market. Piramal said the company was setting up manufacturing lines at Digwal to supplement Sevoflurane manufacturing capacity at Bethlehem (US). The company is also significantly increasing the key starting material (KSM) manufacturing capacity at Dahej to increase vertical integration

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