Summary
Piramal Pharma Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026, 10:00 AM
Event Participants
Executives 4 Gagan Borana (Head IR & ERM), Nandini Piramal (Chairperson), Peter DeYoung (CEO, Global Pharma), Vivek Valsaraj (CFO)
Analysts 8 Abdulkader Puranwala, Alankar Garude, Amay, Avnish Tiwari, Dhruv Zobalia, Madhav, Parikshit Gupta, Tushar Manudhane
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹2,140 crores | -3% YoY; Impacted by inventory destocking of a large on-patent product and slow CDMO order inflows in H1. |
| EBITDA Margin | 11.0% | - bps YoY; Partially offset by cost optimization; Q3 margin sits above the 9M FY26 average of 10%. |
| Net Debt | ₹4,200 crores | Flat vs March 2025; Management expects a slight increase toward the end of the fiscal year. |
| CDMO Revenue | ₹1,166 crores | - bps YoY; Muted by customer destocking, though “like-for-like” base business grew in low single digits. |
| PCH Sales Growth | +20% YoY | + bps YoY; Driven by “Power Brands” (+30%) and E-commerce growth (+50%). |
| R&D/Quality Audits | 170 audits | +20% YoY; Completed 30 regulatory inspections (including 2 USFDA) with zero OAIs in 9M. |
Geographic & Segment Commentary
- CDMO: Revenue hit by destocking in a major commercial product and inconsistent U.S. biopharma funding in H1. However, RFPs and order inflows spiked starting October 2025, particularly at onshore North American facilities (Grangemouth, Riverview).
- Complex Hospital Generics (CHG): Maintained 47% U.S. market share in Sevoflurane and 75% in intrathecal Baclofen. Growth was tempered by regulatory delays in rest-of-world (ROW) supplies from the Digwal facility.
- India Consumer Healthcare (PCH): Strong momentum led by Little’s, Lacto Calamine, and the i-range. E-commerce now represents 26% of segment sales, with media spend maintained at 12% of revenue.
Company-Specific & Strategic Commentary
- Kenalog Acquisition: Agreed to acquire branded injectable Kenalog from BMS for $35M upfront + $65M milestones. The product generates $30M–$40M annually and aligns with existing CHG hospital distribution channels.
- Capacity Expansion: Progressing $90M investment in Lexington (sterile injectables) and Riverview (payload linkers). Linker expansion at Riverview is expected online in Q4 FY26; Lexington by end of CY2027.
- Onshoring Trend: Management noted significant customer interest in North American sites (Sellersville, Riverview, Lexington) driven by supply chain security and “alternative to China” sentiment.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Q4 FY26 Performance | Sequential Growth | Q4 is historically the strongest, though YoY comparisons are tough due to a large one-time order in Q4 FY25. |
| FY27 Context | Recovery Year | Management expects growth from Digwal ROW approvals and improved CDMO funding to materialize in FY27. |
| Long-Term Revenue | $2 Billion (2030) | Reaffirmed long-term target; reliance on CDMO RFP conversion and power brand scaling in PCH. |
| Asset Utilization | 2.0x – 2.5x | Long-term target for overseas facilities as they currently operate at suboptimal scale (below 1.0x). |
Risks & Constraints
| Risk | Context |
|---|---|
| Customer Concentration | Inventory destocking by a single large commercial customer significantly dragged down FY26 CDMO performance. |
| Regulatory Delays | Slower-than-expected ramp-up in ROW markets for Sevoflurane due to delayed approvals at the Digwal facility. |
| Funding Volatility | CDMO performance remains sensitive to the U.S. biotech funding environment, which showed inconsistency in H1 FY26. |
Q&A Highlights
CDMO Recovery & RFPs
- Question: What is driving the RFP improvement and the 180-day lead time? (Shyam Srinivasan)
- Answer: Funding in U.S. biopharma in H2 CY25 was double H1 levels. RFPs for Phase-3/late-stage programs are up as clients seek supply security and China alternatives. Decision cycles from RFP to order typically take ~180 days (Peter DeYoung).
Kenalog Acquisition Rationale
- Question: Why acquire a product in value decline with no patent? (Tushar Manudhane)
- Answer: High manufacturing complexity limits competition. It uses existing hospital sales infrastructure with no incremental cost, delivering EBITDA margins comparable to the current CHG portfolio (Peter DeYoung).
Large Contract Resumption
- Question: Any update on the resumption of the large destocked contract? (Alankar Garude)
- Answer: No material update. Lead time between a client signal and supply resumption is roughly three quarters (Peter DeYoung).
Tax Incidence vs. Losses
- Question: Why is there a tax incidence despite reported losses? (Vinod Jain)
- Answer: Multi-jurisdictional presence means some sites are profitable while others (overseas) are suboptimal. Effective Tax Rate (ETR) target remains 24%-25% as utilization improves (Vivek Valsaraj).
Key Takeaway
Piramal Pharma reported a muted Q3 FY26, with revenues declining 3% YoY to ₹2,140 crores, primarily due to client inventory destocking and a slow biopharma funding environment in H1. Strategically, the company remains focused on complex niches, evidenced by the $35 million Kenalog acquisition and the expansion of the Riverview and Lexington facilities. While FY26 is described as a “muted” year, management highlighted a sharp rebound in RFP activity since October 2025 and record consumer healthcare growth (+20% in Q3). The complex hospital generics segment continues to hold dominant U.S. market shares (47% in Sevoflurane), though rest-of-world expansion faced regulatory delays. Management maintains its long-term $2 billion revenue target for 2030 but acknowledges that FY27 growth will depend on the sustained velocity of CDMO order inflows and the successful integration of new products.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: