Piramal Pharma share price jumps 5%, up 64% in 1 year; top brokerages bullish on stock
Piramal Pharma share price soared 5% on January 13, bucking weak market trends. Over the last year, the stock has gained 64%.
Shares of Piramal Pharma saw strong buying interest on Monday, January 13, defying weak market sentiment. While the equity benchmark Sensex crashed over a per cent, Piramal Pharma share price surged over 9 per cent after three sessions of losses. Piramal Pharma share price opened at ₹217.85 against its previous close of ₹221.65 and jumped 9.45 per cent to the level of ₹242.60. It was the biggest intraday jump in the stock since November last year. On November 29, the stock had jumped 12 per cent in intraday trade but closed with a gain of 9.34 per cent.
On Monday, January 13, the stock finally closed 4.87 per cent up at ₹232.45 apiece on the BSE.
Brokerages bullish on stock
Several top brokerage firms have expressed their positive views on the Piramal Pharma stock in the recent past.
In January's first week, global brokerage firm Jefferies raised its target price for the stock to ₹310 from ₹260. Jefferies expects Piramal Pharma to continue its momentum in 2025 due to traction in the contract manufacturing space. The brokerage firm expects Piramal Pharma to see a margin expansion supported by operating leverage.
Brokerage firm JM Financial initiated coverage on the stock with a buy rating in December last year. It set the target price of the stock at ₹340.
The brokerage firm's bullish view of the stock is due to the significant growth prospects of the CRDMO (contract research, development, and manufacturing organisation) industry in the coming few years. The brokerage firm believes Piramal Pharma’s CDMO (contract development and manufacturing organisation) business, its largest revenue segment, is key to its outperformance.
"By 2028, the Indian CRDMO industry will be two times FY23 levels, positioning the country as an emerging destination for innovator companies to partner. Piramal Pharma's differentiated offerings, global
manufacturing presence and end-to-end capabilities set it apart from its listed Indian CDMO peers. This will help the company capitalize on the ongoing industry expansion," said JM Financial.
"Gaining traction through newly commercialised molecules and a recovery expected in the US biotech sector starting in the second half of the current financial year (H2FY25) will help the CDMO segment achieve a 17 per cent CAGR over the next three years. Combined with steady growth in complex hospital generics and scale-up of consumer health business, the topline is expected to grow nearly 15 per cent over FY24-27," JM Financial said.
The brokerage firm expects the company's margins to expand nearly 360 bps to 18 per cent over FY24-27, with an increasing contribution of on-patent manufacturing.
"We build in a 23 percent+ EBITDA CAGR, which will result in steady cash generation and improve the net debt position, a key concern for investors," JM Financial said.
Piramal Pharma share price trend
Till January 13 close, Piramal Pharma's share price has gained about 64 per cent in the last one year. The stock hit a 52-week low of ₹114.45 on March 15 and a 52-week high of ₹307.85 on November 6 last year.
On a monthly scale, the stock is down 12 per cent in January so far after a 1 per cent decline last month.
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