Is It Worth Buying The Stock Amid Falling Revenues, EBITDA and Margins?
Synopsis:- A brokerage has given a ‘Buy’ call with a Rs 230 target, implying 52% upside from Rs 151.20. Q3FY26 saw a 3% YoY decline and margins compressed to 9%. Despite short-term pressure, a 140-molecule pipeline, 47% US market share, and a strategic US$35 million acquisition support a long-term recovery outlook.
India’s pharma sector hit Rs 4.72 lakh crore turnover in FY25, fueled by 8.4% domestic market growth to Rs 2.25 lakh crore, led by cardiac (10.8%), GI (10.2%), and anti-diabetic therapies. Exports soared 9.3% to $30.5 billion, cementing its status as the world’s third-largest by volume and pharmacy to the globe.
With a market capitalisation of Rs 20,144.76 crore, the shares of Piramal Pharma Ltd were trading at Rs 151.45 per share, decreasing around 0.10 percent as compared to the previous closing price of Rs 151.60 apiece.
Brokerage Recommendations
ICICI Direct has issued a strong ‘Buy’ recommendation on the pharma stock, setting a target price of Rs 230, which suggests a potential upside of 52% from its current level of Rs 151.20. The call reflects confidence in the company’s growth prospects, improving fundamentals, and potential value unlocking ahead.
As per the brokerage, Q3FY26 performance remained under pressure due to destocking and order postponements. Revenue declined around 3% YoY to Rs 2,140 crore, led by a 9% fall in the CDMO segment. EBITDA dropped sharply by 42%, with margins contracting to 9% amid higher employee and operating costs. However, sequential improvement was visible.
The brokerage noted short- to mid-term challenges, particularly slower CDMO recovery and weak US biopharma funding. Still, management highlighted improved funding trends in H2CY25 and a strong pipeline of 140 molecules, including 30+ in Phase III. With continued capex and long-term revenue targets intact, normalisation is expected from FY27 onward.
Financials
Piramal Pharma Ltd’s CHG business is expanding with the US$ 35 million acquisition of Kenalog, along with up to US$ 65 million in contingent payments, strengthening its complex injectable portfolio. In the US Sevoflurane market, the share improved to 47% from 44%. It retained a dominant 75% share in intrathecal Baclofen, while supply issues seen in Q2FY26 have now normalised.
In December 2025, Operating profit dropped sharply from Rs 338 crore in Dec 2024 to Rs 196 crore. The operating profit margin also weakened significantly from 15% to 9%, indicating pressure on core profitability.
Profit after tax showed a notable deterioration year-on-year. The company reported a modest profit of Rs 4 crore in December 2024, but this turned into a loss of Rs 136 crore in December 2025. The sharp decline reflects rising cost pressures and weaker operating performance over the year.
Piramal Pharma Ltd is a global pharmaceutical company with a strong presence in contract development and manufacturing, complex hospital generics, and consumer healthcare. The company serves customers across more than 100 countries, focusing on innovation, quality, and specialised manufacturing capabilities to deliver high-value and niche healthcare solutions worldwide.
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