Piramal Pharma Q1 FY26: CDMO Growth Holds Strong Amid Destocking Drag

Piramal Pharma Limited reported its Q1 FY26 results, showing resilience in its Contract Development and Manufacturing Organisation (CDMO) business despite a dip in total revenue. Revenue from operations stood at ₹1,934 crore compared to ₹1,951 crore in Q1 FY25. The decline was primarily due to inventory destocking of a major on-patent commercial product. Adjusting for this, the company posted double-digit year-on-year growth in its base CDMO business.

CDMO Momentum Continues

Piramal’s CDMO segment delivered mid-teen growth, led by robust performance and profitability improvements at its overseas facilities. The company also saw strong traction in its nutrition supplements and generic API portfolio, while driving cost optimisation via procurement strategies and operational excellence.

Highlighting regulatory compliance, the USFDA inspection at its Aurora (Canada) facility concluded with zero observations, continuing Piramal’s “Zero OAI” record since 2011. The Aurora site is central to the company’s API manufacturing capabilities.

Notably, Piramal also broke ground on its capacity expansion project at its Lexington, US site — a sterile injectable manufacturing facility that plays a pivotal role in the company’s growing integrated antibody-drug conjugate (ADC) program.

“Excluding the impact of destocking in one large on-patent commercial product, our CDMO business delivered mid-teen revenue growth… with improvement in EBITDA margin, especially at our overseas sites,” said Nandini Piramal, Chairperson, Piramal Pharma Limited.

Operational Highlights Across Segments

• EBITDA margin dropped slightly to 9% from 11% in Q1 FY25, impacted by the destocking, though gains at overseas CDMO sites offered partial offset.
• The net debt to EBITDA ratio stands at 2.6x.
• The company received a sustainability rating of 61 for FY2024 from NSE Sustainability Ratings and Analytics.

Challenges and Outlook

The recovery in biotech funding remains inconsistent, affecting early-stage project decisions. However, Piramal is optimistic about growth in its Complex Hospital Generics (CHG) and Consumer Healthcare (PCH) segments in the coming quarters. Its CHG business saw a temporary slowdown due to shipment timing and institutional order cycles, with recovery expected in Q2 FY26. Meanwhile, PCH registered a strong 18% YoY growth in its Power Brands, bolstered by a 41% rise in e-commerce sales.

Looking ahead, Piramal remains committed to its FY2030 ambition of achieving $2 billion in revenue with 25% EBITDA margin and high-teen ROCE.