Jefferies initiates Piramal Pharma at 'buy' rating

Piramal Pharma (Mumbai)

03/01/2023 04:39

** Jefferies initiates coverage of Piramal Pharma  PIRM.NS 
with "buy" rating at a price target of 150 rupees
    ** It says PIRM's Contract Development and Manufacturing
Organization (CDMO) business is "on the cusp of a turnaround
as headwinds faced over the last 12-18 months are getting
resolved"
    ** Jefferies estimates a 12% rise in revenue over FY22-25E
on CDMO turnaround, steady growth for complex hospital generics,
and scale-up of consumer health, which would "allay leverage
concerns" 
    ** Also says stable growth in co's US inhalation anaesthesia
market and addition of fresh capacities and new injectable
launches in non-US markets should allow double-digit growth over
the next few years in complex hospital generics (CHG) business
    ** Jefferies values PIRM's CDMO business at a 20% discount
and the India consumer health business at a 60% discount to
peers. 
    ** The CHG business is valued in line with peers 
    ** Piramal shares rise as much as 3.4% to 126.6 rupees,
highest since Dec 21, 2022
    ** Stock set to rise for a second straight session, if gains
hold
    ** More than 1.6 million shares change hands by 9:50 a.m.
IST vs 30-day avg of 2.6 million shares
 (Reporting by Anuran Sadhu in Bengaluru)
 ((Anuran.Sadhu@thomsonreuters.com ;))