Piramal Pharma Ltd is starting to see early signs of a recovery in its contract manufacturing business, with order inflows picking up on the back of improved biopharma funding and increased dealmaking activity in the US offering some relief even as the company looks at a muted FY26.
“We are seeing early signs of recovery. We've seen a pickup in RFPs (requests for proposal) and order inflows, and we're not changing our FY26 guidance,” chairperson Nandini Piramal said at a press conference on Thursday.
The company posted its results for the third quarter of FY26 late Wednesday, with its revenue down 3% year-on-year to ₹2,140 crore, and a loss of ₹136 crore from a net profit of ₹4 crore in Q3FY25. Its ebitda margin shrank from 16% a year ago to 11% in the reporting quarter.
The company had earlier guided for a mid-single digit revenue growth with the ebitda margin for FY26 pegged at high teens. Piramal, however, exuded optimism over Q4—historically, its strongest quarter—and said she expects sequential growth. However, “year-on-year, it will be difficult because Q4 last year had a lot of large products,” Piramal said.
CDMO drag
Piramal Pharma’s performance this fiscal has been bogged down by inventory destocking in one of its large on-patent commercial products, affecting its CDMO business—its largest growth driver. In Q3, revenue from its CDMO business fell 9% year-on-year to ₹1,166 crore. Slow order flows also affected the business.
“Internally, we have seen RFPs are up, but those will still take time to convert… that translation to orders will take six months,” said Piramal said adding that the company is focused on building scale and broadening its product portfolio and customers to derisk the business.
The company announced on Wednesday that it had acquired Kenalog, a commercial injectable product from Bristol Myers Squibb for an upfront consideration of $35 million, and contingent consideration of up to $65 million.
“We expect annualized sales of $30-40 million,” said Piramal. “It is a product that has limited competition and we expect that it will add incremental revenue without a lot of incremental cost to the business. It is a complex and hard-to-manufacture product… As part of our strategy to broaden our base, we are looking at developing our own licensing as well as acquiring products.”
The product will bolster the Piramal's complex hospital generics business. The business grew 2% in Q3FY26 to ₹668 crore.
Meanwhile, its consumer healthcare business saw a robust growth of 20% to ₹334 crore during the quarter.
With the company reaffirming its FY26 earnings guidance, Piramal Pharma’s stock price was up 3.7% at ₹159.70 at 12.51 pm on the National Stock Exchange.