Why Piramal Pharma shares jumped 4% despite Q3 loss: Street bets on recovery
- 30th January 2026
- 11:55 AM
- 4 min read
Summary
Shares of Piramal Pharma rose about 4% on Friday despite the company reporting a net loss of ₹136 crore in Q3FY26. Investors looked past the headline loss, focusing instead on one-time exceptional costs, sequential improvement in revenue and Ebitda, early recovery signals in the CDMO business, and strong growth momentum in consumer healthcare.Mumbai | January 30
Piramal Pharma shares moved higher even as the company posted a loss for the December quarter, underscoring the market’s focus on forward-looking indicators rather than near-term earnings pressure. The stock climbed as much as 4% to an intraday high of around ₹163, compared with the previous close of ₹154.25.
Q3FY26: Weak YoY, sequential improvement visible
For Q3FY26, Piramal Pharma reported a net loss of ₹136.2 crore, compared with a profit of ₹3.7 crore in the year-ago period and a loss of ₹99 crore in Q2FY26. The company said the quarterly loss included ₹41 crore of exceptional items, comprising gratuity and leave encashment costs due to changes in labour laws (₹26 Cr) and a settlement with a CDMO customer (₹15 Cr).
Revenue from operations declined 3% year-on-year to ₹2,140 crore, but rose 4.7% sequentially from ₹2,044 crore in Q2FY26, indicating stabilisation after a weak first half.
EBITDA fell sharply 42% YoY, while margins compressed to 9.1% from 15.3% a year ago. On a quarter-on-quarter basis, EBITDA improved, aided by cost optimisation and operational efficiency initiatives.
CDMO slowdown weighs on Q3 performance
Segment-wise, the contract development and manufacturing organisation (CDMO) business saw the steepest impact during the quarter. CDMO revenue declined 9% year-on-year to ₹1,166 crore, hit by inventory destocking by a large customer, slower early-stage order inflows amid uneven US biopharma funding recovery, regulatory delays at the Digwal facility, and global trade uncertainties.
In contrast, the company’s other businesses showed resilience. The complex hospital generics segment reported modest growth, while consumer healthcare stood out, with revenue rising 20% YoY to ₹334 crore, supported by strong performance in power brands and rapid growth in e-commerce channels.
Management commentary
Commenting on the performance, Nandini Piramal said FY26 has been a muted year due to inventory destocking and slower early-stage order inflows in the CDMO business.
She added that early signs of recovery are now visible, with improving RFP activity and order inflows. The company, she said, continues to invest in expanding its complex hospital generics and consumer healthcare businesses, particularly in ex-US markets.
She also reiterated that Q4 has historically been the strongest quarter for Piramal Pharma and expressed confidence that this trend will continue.
Why did the stock rise despite weak Q3 numbers?
The positive stock reaction suggested that investors were willing to look past the near-term weakness. Market participants took comfort from the fact that the Q3 loss was driven largely by one-off exceptional items, including labour law–related costs and a customer settlement, rather than a structural deterioration in the business.
Sequential improvement in revenue and EBITDA also signalled stabilisation after a weak first half, while management’s commentary around improving RFP momentum pointed to a gradual recovery in the CDMO segment. The continued strength in consumer healthcare further strengthened confidence in the company’s earnings mix.
Together, these factors improved visibility on a potential earnings recovery from FY27, helping offset concerns around the current-year slowdown.
Capex and acquisitions support long-term outlook
Piramal Pharma reiterated its $90 million growth capex plan to expand the Lexington and Riverview facilities, noting healthy customer interest. The company also highlighted its strong regulatory track record, with zero USFDA OAI observations and 30 regulatory inspections cleared during 9MFY26.
In addition, the acquisition of the Kenalog brand for an upfront $35 million is expected to add incremental revenue without materially increasing costs, further strengthening the medium-term growth profile.
Bottom line
Despite a weak Q3 on a year-on-year basis, Piramal Pharma’s stock reacted positively as investors priced in recovery in the CDMO business, resilience in consumer healthcare, and improved earnings visibility beyond FY26.
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