Piramal Pharma posts robust Q2 growth, expands Lexington facility to meet demand

Piramal Pharma Limited (NSE: PPLPHARMA | BSE: 543635) has reported strong growth for the second quarter (Q2) and first half (H1) of the fiscal year 2024-2025. The company’s consolidated revenue for Q2 rose by 17% year-on-year (YoY) to ₹2,242 crore, supported by significant demand in its contract development and manufacturing organization (CDMO) business. Piramal also revealed plans to expand its Lexington facility in the United States with an $80 million investment aimed at enhancing sterile fill-finish capabilities to cater to the rising global demand.

Q2 Financial Performance

In Q2 FY25, Piramal Pharma’s revenue growth was primarily driven by its CDMO segment, which recorded a 24% increase YoY, reaching ₹1,324 crore. The complex hospital generics (CHG) business contributed ₹643 crore, marking a 9% rise, while the India Consumer Healthcare (ICH) segment reported an 8% growth, with revenue at ₹277 crore.

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 28% YoY to ₹403 crore, reflecting an EBITDA margin expansion to 18%. The management highlighted operational efficiency and cost optimization measures as key factors behind the improved margins.

Lexington Expansion to Double Capacity

Piramal Pharma announced an $80 million expansion plan at its Lexington facility, aimed at doubling its sterile fill-finish capabilities. The expansion includes adding 24,000 square feet of manufacturing space and integrating advanced machinery, including two commercial-sized lyophilizers and an external vial washer. The company expects the project to complete by the end of FY27.

Strategic Highlights and Expert Insight

Nandini Piramal, Chairperson of Piramal Pharma Limited, stated that the company’s ongoing focus on expanding its CDMO capabilities has driven consistent growth. She emphasized that the expansion at Lexington is vital for capturing the rising demand for sterile injectables, particularly in markets with increasing regulatory requirements.

Industry analysts acknowledge the company’s strategic focus, noting that investment in differentiated capabilities like sterile fill-finish and high-potency active pharmaceutical ingredients (APIs) aligns well with global trends. Regulatory changes and biotech funding fluctuations have influenced customer decision-making, but Piramal’s proactive approach to diversify its supply chain and strengthen its portfolio positions it favorably.

Focus on Sustainable Growth

Piramal also released its FY24 Sustainability Report, aligned with the Global Reporting Initiative (GRI) standards and Science-Based Targets initiative (SBTi), committing to reducing greenhouse gas emissions in line with global decarbonization goals. The company’s sustainability efforts are aimed at maintaining its growth trajectory while ensuring responsible business practices across its global operations.

Outlook for FY25 and Beyond

Piramal Pharma has reiterated its long-term target to achieve $2 billion in revenue with a 25% EBITDA margin by FY30. The company is focused on enhancing its profitability through operational excellence, portfolio diversification, and strategic investments in differentiated products.

As of the latest trading session, Piramal Pharma’s shares on the NSE closed at ₹234, showing a modest gain of 1.5% following the earnings announcement, reflecting investor confidence in the company’s growth strategy and expansion plans.