Jefferies has reiterated its “Buy” rating on Piramal Pharma, raising the target price to ₹260, which implies a 20% upside from the previous close of ₹216. This bullish outlook comes after a management meeting provided promising takeaways about the company’s future growth and profitability.
Piramal Pharma aims to grow its revenue to over USD 2 billion with a 25% EBITDA margin by the fiscal year 2030. This ambitious target translates to a revenue CAGR of 12.2% and an EBITDA CAGR of 20.3%. Jefferies believes these goals are achievable, driven by a higher contribution from innovator Contract Development and Manufacturing Organization (CDMO) contracts, which are expected to provide operating leverage benefits and improve the return on capital employed (RoCE).
Despite ongoing capital expenditures, Piramal Pharma expects to reduce its net debt to EBITDA ratio to 1x by FY30, down from 3.4x in FY24. Additionally, Jefferies has increased its EBITDA estimates for FY25 and FY26 by 4-10%, based on stronger margin expectations.
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