Motilal Oswal Maintains Buy Rating for Piramal Pharma, Target Price Rs 190

Piramal Pharma's Revenue Matches Expectations, Earnings Surpass in 4QFY26

Piramal Pharma (PIRPHARM) has reported in-line revenue for the fourth quarter of fiscal year 2026 (4QFY26). However, the company's Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) fell short of expectations by 8%, primarily due to a change in product mix. On the other hand, a lower tax rate led to higher-than-expected earnings in 4QFY26.

Key Segment Performance

The company's Contract Development and Manufacturing Organization (CDMO) segment experienced a deceleration in growth in 2Q and 3Q of FY26, compared to 4QFY26. However, excluding inventory destocking for a certain on-patent molecule, the CDMO segment has shown growth in 4QFY26 and FY26. Notably, PIRPHARM has secured USD64 million in sales from the Antibody-Drug Conjugate (ADC) segment for FY26.

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Outlook and Valuation

Motilal Oswal's research team values PIRPHARM on a Sum of the Parts (SoTP) basis, using the following multiples:

Based on these multiples, the team's target price (TP) for PIRPHARM is INR190. The company faced weak performance in FY26 due to inventory destocking for a product and intensified competition in the CHG segment. However, with a revival in biotech funding and the addition of new products or cost reduction in the CHG segment, the team expects PIRPHARM to deliver better growth in FY27. As a result, Motilal Oswal reiterates its BUY recommendation for PIRPHARM.

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