Piramal Pharma Navigates Headwinds with Strategic Investments and Strong Consumer Growth in Q2 & H1 FY26

Piramal Pharma Limited, a prominent player in the global pharmaceutical, health, and wellness sector, recently unveiled its consolidated financial results for the second quarter (Q2) and first half (H1) of fiscal year 2026. The period saw the company navigate through specific market challenges, yet it continued to fortify its strategic position through targeted investments and robust performance in key segments. While headline financials reflected a temporary dip, the underlying narrative points to a company focused on long-term value creation and operational resilience.

For Q2 FY26, Piramal Pharma reported consolidated revenues of ₹2,044 crore, marking a 9% year-on-year decline. The first half (H1 FY26) also saw a 5% decline in revenue, totaling ₹3,977 crore. This moderation was primarily attributed to inventory destocking by a major customer in a large Contract Development and Manufacturing Organization (CDMO) order for an on-patent commercial product. Consequently, EBITDA for Q2 FY26 stood at ₹224 crore (down 44% YoY) and ₹389 crore for H1 FY26 (down 38% YoY), with EBITDA margins moderating to 11% and 10% respectively. Despite these headwinds, the company's diligent focus on cost optimization and operational excellence helped partially mitigate the impact on profitability.

Segmental Performance: A Mixed Bag with Strategic Upsides

The CDMO business experienced a 21% decline in Q2 FY26 revenue, reaching ₹1,044 crore, primarily due to the aforementioned inventory destocking. Early-stage discovery and development order inflows were also slower, impacted by inconsistent recovery in US biopharma funding and global trade policy uncertainties. However, the management noted a significant uptick in biopharma funding in September and October 2025, signaling potential recovery. The company is actively pursuing increasing RFPs/RFIs for its onshore manufacturing facilities and differentiated capabilities like ADCs and sterile fill-finish, backed by timely investments.

The Complex Hospital Generics (CHG) business demonstrated resilience, with Q2 FY26 revenue at ₹644 crore, maintaining a stable performance. The company solidified its #1 position in the mature US Sevoflurane market with a 45% value share and in intrathecal Baclofen with a 75% value share. While intrathecal therapy sales faced temporary supply challenges, normalization is expected in H2 FY26. Efforts to resolve supply constraints in Injectable Anesthesia and Pain Management are yielding results, and investments in 505(b)(2)'s and differentiated generics are ongoing for long-term growth.

Piramal Consumer Healthcare (PCH) emerged as a strong performer, delivering sustained growth of 15% in Q2 and H1 FY26. Its power brands, including Little's, Lacto Calamine, CIR, and i-range, grew by a robust 20% year-on-year, contributing 51% to total PCH sales. E-commerce sales surged over 40% year-on-year, now accounting for approximately 24% of PCH sales, with quick commerce driving over 40% of these sales. The company also launched 26 new products and SKUs in H1 FY26, with products launched in the last 24 months contributing 8% to FY25 PCH sales.

Below is a financial summary table:

Strategic Investments and Future Outlook

Piramal Pharma's strategic vision is underscored by significant investments aimed at future growth. The company initiated a US$90 million investment to expand its Lexington and Riverview facilities in the US, enhancing capabilities for sterile injectables, payload-linker development, and manufacturing. This 'ADCelerate' programme is crucial for meeting rising market demand and strengthening onshore presence. Additionally, a multi-million-dollar joint investment at the Sellersville site with NewAmsterdam Pharma will provide commercial manufacturing capacity for a fixed-dose combination drug, showcasing the company's ability to secure key partnerships and leverage its global network for dual sourcing.

On the balance sheet front, the company demonstrated disciplined capital allocation, reducing net debt by ₹228 crore from March 2025 to ₹3,971 crore by September 2025. This was achieved through tight control over working capital and capital expenditure, maintaining a net debt to EBITDA ratio below 3x. The company also maintained an impeccable quality and compliance track record, with zero Official Action Indicated (OAI) observations from regulatory inspections, including a US FDA inspection at its Aurora facility.

Management's Forward-Looking Perspective

While moderating its full-year revenue guidance for FY26 to remain flat and EBITDA margins to low teens, management expressed confidence in a stronger second half (H2 FY26), aligning with historical trends. They anticipate a better performance in FY27, driven by increased customer interest in onshore offerings and differentiated CDMO capabilities. The long-term vision remains intact, with the company reiterating its FY30 targets of doubled revenue and a 25% EBITDA margin. This outlook is supported by ongoing efforts to expand into ex-US markets for CHG products and sustained momentum in the PCH segment.

Piramal Pharma Limited's Q2 and H1 FY26 results reflect a period of strategic recalibration amidst specific market challenges. The company's proactive investments in enhancing manufacturing capabilities, strengthening its product portfolio, and maintaining a robust financial position underscore its commitment to long-term sustainable growth. With a clear focus on operational excellence and strategic expansion, Piramal Pharma is poised to capitalize on emerging opportunities and reinforce its position as a diversified global pharma and wellness company.