Motilal Oswal has maintained a “buy” rating on Piramal Pharma despite the company facing near-term headwinds. The brokerage firm reviewed Piramal Pharma’s Q2 results and noted that the company’s performance was impacted by one-time items and supply chain disruptions. However, Motilal Oswal remains positive on the company’s long-term prospects.
Piramal Pharma’s Q2 revenue grew 9% year-on-year to Rs 1,543 crore, driven by a 13% growth in the pharmaceutical segment. However, the company’s EBITDA margin declined 230 basis points to 17.1% due to higher raw material costs and supply chain disruptions. The brokerage firm noted that the company’s performance was also impacted by one-time items, including a Rs 35 crore provision for a regulatory issue.
Despite the near-term headwinds, Motilal Oswal remains positive on Piramal Pharma’s long-term prospects. The brokerage firm noted that the company’s pharmaceutical segment has a strong product portfolio and a significant presence in the global market. Piramal Pharma’s contract manufacturing business also has a strong client base and a robust order book.
Motilal Oswal has maintained a target price of Rs 2,130 on Piramal Pharma, implying a potential upside of 22% from current levels. The brokerage firm believes that the company’s long-term growth prospects are intact, driven by its strong product portfolio, significant presence in the global market, and robust order book.
The Q2 results of Piramal Pharma were also impacted by the company’s investment in its research and development (R&D) capabilities. The company has increased its R&D spend to 12% of sales, which is expected to drive long-term growth. Motilal Oswal noted that Piramal Pharma’s R&D capabilities are a key differentiator and will help the company to drive growth in the long term.
Overall, Motilal Oswal’s “buy” rating on Piramal Pharma is driven by the company’s strong long-term prospects, despite the near-term headwinds. The brokerage firm believes that the company’s pharmaceutical segment has a strong product portfolio and a significant presence in the global market, and its contract manufacturing business has a strong client base and a robust order book. With a target price of Rs 2,130, Motilal Oswal sees a potential upside of 22% from current levels.