How has been the historical performance of Piramal Pharma?

Dec 03 2025 10:57 PM IST

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Piramal Pharma has shown a generally upward trend in net sales and operating profit from Mar'22 to Mar'25, despite fluctuations in profit before and after tax. Total liabilities and assets have increased, indicating growth, while cash flow has been variable.

Revenue and Profitability Trends

Over the last four fiscal years, Piramal Pharma’s net sales have shown consistent growth, rising from ₹6,559 crore in March 2022 to ₹9,151 crore by March 2025. This represents a compound annual growth rate (CAGR) of approximately 11.5%, reflecting the company’s expanding market presence and operational scale. Total operating income mirrored this trend, with no other operating income reported, indicating that core business activities have driven revenue growth.

Operating profit before other income (PBDIT) exhibited volatility, with a dip in March 2023 to ₹628 crore from ₹950 crore in March 2022, before rebounding strongly to ₹1,445 crore in March 2025. The operating profit margin excluding other income improved from 14.48% in 2022 to 15.79% in 2025, signalling enhanced operational efficiency despite cost pressures.

However, profitability at the net level has been more erratic. The company reported a consolidated net profit of ₹376 crore in March 2022, which plunged to a loss of ₹186 crore in March 2023, before recovering to a modest profit of ₹91 crore in March 2025. Earnings per share followed a similar pattern, swinging from a positive ₹3.10 in 2022 to a negative ₹1.56 in 2023, and back to a positive ₹0.69 in 2025. This fluctuation underscores challenges in managing costs, interest expenses, and tax liabilities during this period.

Cost Structure and Expenses

The company’s expenditure profile reveals rising raw material costs, increasing from ₹1,567 crore in 2022 to ₹2,056 crore in 2025, alongside a similar rise in purchases of finished goods. Employee costs also escalated steadily, reaching ₹2,307 crore in 2025 from ₹1,589 crore in 2022, reflecting workforce expansion or wage inflation. Other expenses rose in tandem, indicating broader operational cost increases. Despite these pressures, the company managed to maintain a gross profit margin of 12.65% in 2025, up from 7.09% in 2023, suggesting improved pricing power or cost control measures.

Balance Sheet and Financial Position

Piramal Pharma’s total assets have grown from ₹12,500 crore in 2022 to over ₹15,280 crore in 2025, driven by increases in net block and capital work in progress, signalling ongoing investments in fixed and intangible assets. Shareholders’ funds rose steadily to ₹8,125 crore in 2025, supporting a book value per share of ₹61.35, up from ₹56.47 in 2022. Total debt levels have fluctuated, peaking at ₹5,505 crore in 2023 before declining to ₹4,720 crore in 2025, indicating efforts to deleverage the balance sheet.

Current assets have also increased, with inventories and sundry debtors rising in line with business growth. Net current assets improved to ₹2,031 crore in 2025, up from ₹1,034 crore in 2022, reflecting better working capital management. Contingent liabilities have increased moderately but remain manageable relative to the company’s asset base.

Cash Flow Analysis

Operating cash flow has shown a positive trend, rising from ₹766 crore in 2022 to ₹892 crore in 2025, despite some volatility in working capital changes. Investing activities have consistently been cash outflows, reflecting capital expenditure and strategic investments, though the outflow reduced significantly in 2025 compared to previous years. Financing activities have swung from positive inflows in 2021 and 2022 to outflows in recent years, consistent with debt repayments and shareholder returns. Overall, net cash position has remained relatively stable, with closing cash and equivalents at ₹182 crore in 2025.

Summary and Outlook

In summary, Piramal Pharma’s historical performance reflects a company navigating growth and profitability challenges amid a dynamic pharmaceutical sector. The steady increase in revenues and operating margins indicates operational resilience, while fluctuations in net profit highlight areas for financial optimisation. The company’s balance sheet shows a solid foundation with growing equity and controlled debt levels, supported by positive operating cash flows. Investors should weigh these factors alongside sector trends and competitive positioning when considering Piramal Pharma’s future prospects.

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