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The brokerage initiated coverage on the pharma company with a “buy” recommendation and a price target of ₹340 per share.
JM Financial expects Piramal Pharma’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow at a Compounded Annual Growth Rate (CAGR) of over 23% and that will result in steady generation of cash for the company.
Piramal Pharma shares are currently trading at 21 times financial year 2026 Enterprise Value-to-EBITDA and 17 times for financial year 2027, which is a discount of 38% to its other listed peers.
The company’s contract manufacturing (CDMO) business is the key to its outperformance going forward as it is the largest revenue segment.
A potential recovery in the US biotech sector in the second half of financial year 2025 and traction gained through newly commercialised molecules, will help Piramal Pharma achieve a 17% CAGR over the next three years for its CDMO business, JM Financial’s note said.
All ten analysts who have coverage on Piramal Pharma have a “buy” recommendation on the stock.
JM Financial’s price target of ₹340 is also the highest on the street for Piramal Pharma, followed by Motilal Oswal’s ₹310 per share.
Shares of Piramal Pharma ended 1.1% higher on Monday at ₹252. The stock has risen 81% so far in 2024.
