Each of the three businesses — contract manufacturing, complex hospital generics and consumer healthcare — will continue the growth trajectory for the year. The slowdown in biotech funding impacted the company last year, which led to firms delaying decisions. “For example, they would wait until the clinical trial was completed before proceeding to the next stage. To some extent, this has stabilised for us, and as a result, we are witnessing a recovery in revenue,’’ she added.
The company’s consumer healthcare business is growing quite rapidly, she said, adding that its turnover will soon touch Rs 1,000 crore, up from the Rs 800 crore in last fiscal. The business that contributes about 15% to the overall revenue is also expected to generate net profits from running at break even currently.
“Our approach is that any profits the business generates until it reaches the point of Rs 1,000 crore in revenue should be reinvested in promotions or new product launches. Once it reaches that scale, it will transition to a profitability phase,’’ Piramal said.
The OTC business buoyed by its power brands — Littles (baby care), Lacto Calamine (skin care), Polycrol (antacid), Tetmosol (derma) and I-range (emergency contraception) — registered a YoY growth of 14% during Q2 FY24. “We see a huge untapped potential in products catering to babies, derma, geriatric products, for the business, which started with a revenue of Rs 65 crore in 2011,” she said.
The company is launching new products like vitamins through e-commerce, which helps in innovation and feedback. Sales through e-commerce grew at over 34% YoY in Q2 FY2024 and contributed 16% to the consumer healthcare revenues. Further, both contract manufacturing and critical care business will see an organic expansion, with capex totalling $100 million for the year, which is similar to last year.
Piramal Pharma, with a revenue of Rs 3,443 crore, recently completed a rights issue, and is using the proceeds to pare debt. Its net debt has reduced by Rs 958 crore since March this year.
The demerged subsidiary which was listed last year includes Piramal Pharma Solutions, an integrated contract development and manufacturing organisation, Piramal Critical Care-complex hospital generics business, and India Consumer Healthcare business selling over-the-counter products.