ABOUT

Piramal Pharma is a large global pharmaceutical company based in India. Piramal Pharma Limited was de-merged from Piramal Enterprises in March 2020 to streamline the group structure. PPL has three main business segments:

Piramal Pharma Solutions (PPS) which is the CDMO wing of the company. 58% of the company's revenue as of March 2024 was derived from its CDMO business and this revenue share has been growing over the years as its a higher margin and growing business. PPL offers end-to-end integrated CDMO services across the entire drug lifecycle, including discovery, development, and commercial manufacturing of drug substances and products. It also offers differentiated service offerings in areas such as high-potent APIs, antibody-drug conjugates (ADCs), peptides, sterile fill finish, and vaccines. The contribution of differentiated offerings to PPL's CDMO revenue increased from 27% in Fiscal Year 2021 to 44% in Fiscal Year 2024. Piramal Pharma Solutions works with a wide range of customers including big pharmaceutical companies, emerging biotechnology companies, and generic pharmaceutical companies. 

Piramal Critical Care (PCC) which is the Complex Hospital Generics wing of the company. 30% of the company's revenue as of March 2024 was derived from this business. PCC is a global player in this segment and enjoys a global position in the Inhalation Anesthesia market which is one of its main products under this segment. Their products are sold in over 100 countries and reach more than 6000 hospitals, surgical centres and veterinary clinics. Their portfolio includes 35 hospital focused products in the areas of, inhalation anesthesia, injectable anesthesia and pain management, intrathecal therapy and other generic and specialty products. One of their products, "Sevoflurane" which is an inhalation anesthesia has a 43% market share in the US market while "Baclofen" which is an intrathecal therapy for spasticity management is sold under the brand name "Gablofen" and holds a 70% market share in the US for the pre-filled syringe and vial segment. Their Inhalation Anesthesia segment accounted for 67% of their revenue from CHG business in FY 2024.

Piramal Consumer Healthcare (PCH) which is the Indian consumer health wing of the company. 12% of the company's revenue as of March 2024 was derived from this business. PCH sells various over-the-counter heathcare and wellness products. It has over 30 consumer healthcare brands across a variety of categories such as "Analgesics, Gastrointestinal, Hygeine, Skincare, Vitamins and supplements, women's care, baby care and kids wellness." This business operates on an asset light model and uses a multi-channel distribution strategy for its products. The company is present in almost 1,80,000 chemist and cosmetic shops, 8,000 modern day trade outlets and 20 e-commerce platforms.

Piramal Pharma Limited has a presence in over 100 countries and has around 17 development and manufacturing facilities around the world. In FY 2024, the company received around 70% of its revenue from regulated markets such as the US, UK and Japan. 20% of its revenue came from India and 10% came from other markets such as Africa. The company has more than 500 customers in its CDMO segment and about 46% of its revenue from this segment comes from the top 10 clients which shows a relatively good client diversification.

EXPANSION

1. Capex plans

• The company has recently completed numerous capex projects and has more capex plans in the coming years across various geographical locations.

• PPL recently completed its expansion at its Riverview facility in Michigan. This will increase the company's production of high-potency Active Pharmaceutical Ingredients (APIs). This expansion went live in FY 23.

• The company also completed its expansion at its Turbhe facility in India. This expansion focused on increase the company's peptide production capacity. This expansion also went live in FY 23.

• PPL also established a new in-vitro laboratory at its Pharmaceutical Development Services (PDS) facility in Ahmedabad, India. This was inaugurated during FY 23.

• PPL completed an expansion project at its Grangemouth facility in UK. This expansion aimed at increasing the company's presence in the Antibody-Drug Conjugate (ADC) segment. This expansion went live in FY 24.

• The company is also expanding capacities in its Dahej and Digwal facilities in India to boost production of inhalation anesthesia to meet the growing demand. 

• Lastly, it is also pursuing a customer-led expansion in its Lexington facility in US. This expansion is primarily focused on the company's fill-finish capacity. The capex funding for this project is being sourced through bank loans and internal accruals.

• The company has pursued and is pursuing a number of expansion projects and this shows the commitment to grow and increase capacity. Their annual capex requirement for maintenance and capacity expansion is estimated at 700-800 crore rupees. The management has also stated that they will also focus on improving and increasing capacity utilization in the coming years. 

2. Partnerships

• The company has a joint venture with AbbVie Inc. called AbbVie Therapeutics India Private Limited. PPL owns a 49% stake in this joint venture. The joint venture focuses on the manufacture, distribution, and sale of ophthalmic pharmaceutical products and contact lens care products in the Indian market. AbbVie Therapeutics India has emerged as one of the market leaders in the ophthalmology therapy area. PPL manufactures medication for diseases, such as glaucoma, dry eye, infections, and inflammations, for the joint venture.

• Piramal Pharma Limited (PPL) also holds a 33.33% equity stake in Yapan Bio Private Limited. Yapan Bio primarily operates as a Contract Development and Manufacturing Organization (CDMO), providing services for the development and manufacture of biologics, vaccines, and gene therapy products for human clinical trials. This investment aligns with PPL's strategic objective to expand its presence in the high-growth biologics market. This investment provides PPL with access to Yapan Bio's customer base and market reach in the biologics segment. This investment was made through two tranches, with PPL acquiring a 27.78% stake on December 20, 2021, and an additional 5.55% stake on April 4, 2022.

• Piramal Pharma Limited's (PPL) India Consumer Healthcare (ICH) business has a manufacturing and distribution agreement with Bayer Pharmaceuticals Private Limited. This agreement covers several of Bayer's brands, including: Saridon (analgesic), Supradyn (multivitamin), Becozym (vitamin B complex) and Benadon (vitamin B1). By manufacturing and distributing Bayer's brands, PPL can significantly expand its ICH product portfolio, offering a wider range of healthcare and wellness products to consumers.

3. Rights issue

• PPL conducted a rights issue in the second quarter of FY 24 which raised a total of Rs. 1050 crore. 

• The primary objective of the rights issue was to raise money to reduce the company's debt. 

• The rights issue was oversubscribed showing strong investor confidence in the company.  

• ₹859.24 crore was allocated towards repayment of specific borrowings. The remaining funds were designated for general corporate purposes.

• The successful completion of the rights issue signifies a positive development for PPL, enhancing its financial stability and providing resources to support its growth strategy. This fundraising effort reflects confidence from shareholders and investors in the company's future prospects.

SECTOR ANALYSIS

FINANCIALS 

PEER COMPARISON

SHAREHOLDING SUMMARY