**Piramal Pharma Forecasts Modest Growth Amid Market Uncertainties**
Piramal Pharma is projecting subdued, single-digit growth for its contract development and manufacturing organization (CDMO) segment in FY26, primarily due to short-term uncertainties as clients delay decisions amid concerns regarding U.S. pricing and tariff policies, according to a senior company executive. However, the Mumbai-based firm is optimistic about a swift recovery in FY27 and remains on track to achieve its goal of becoming a $2 billion company with 25% EBITDA margins by FY30, as stated by chairperson Nandini Piramal.
Piramal noted an increase in uncertainty and volatility in the market, citing factors such as pricing cuts, tariffs, and uneven biotech funding. “Many customers are pausing their decision-making processes,” she explained, while also mentioning a rise in requests for proposals (RFPs) from potential clients as they explore various scenarios.
A CDMO provides a range of services, including drug development, clinical trials, and manufacturing, to pharmaceutical and biotech firms on a contract basis. Piramal expressed confidence that FY27 will witness a significant recovery for the CDMO business.
Recent developments, including an executive order signed by President Trump aimed at reducing prescription drug costs in the U.S. to align with the lowest global prices, have added to the uncertainty. The order also includes potential import tariffs on pharmaceutical products to encourage domestic manufacturing, although the specifics of these measures remain unclear.
Piramal Pharma anticipates steady growth in its consumer healthcare and complex hospital generics sectors in the upcoming year, asserting that the company is well-positioned to meet demand in the CDMO space. “Once the uncertainty subsides, we have the capacity, capabilities, and one of the best networks in the U.S., the U.K., and India, depending on where our customers wish to manufacture their products,” she added.
The CDMO segment accounted for 59% of Piramal Pharma’s overall revenues in FY25. Earlier this week, the company announced a $90 million investment to enhance its manufacturing capabilities at two key U.S. facilities located in Lexington, Kentucky, and Riverview, Michigan. Piramal highlighted a growing demand for onshoring post-COVID, particularly for on-patent pharmaceuticals and complex drugs, to be closer to customers.
The expansion of the Lexington facility is expected to be completed by 2027, while the Riverview facility’s expansion is set to finish within this calendar year.
Piramal Pharma has experienced a notable recovery in FY24 and FY25, achieving a 14% compounded annual growth rate (CAGR), over 500 basis points of EBITDA margin improvement, and significant net profit growth, as detailed in an investor presentation. The company has also reduced its net debt/EBITDA ratio from 5.6x in FY23 to 2.7x in FY25.
**FAQ**
**What is the outlook for Piramal Pharma’s CDMO business?**
Piramal Pharma expects muted, single-digit growth for its CDMO business in FY26 due to market uncertainties but anticipates a strong recovery in FY27.