Piramal Pharma stock surges over 8% in a weak market

Shares of Piramal Pharma saw a sharp rally on January 13, 2025, rising over 8 per cent despite broader market weakness, with key indices falling more than 1 per cent. The stock snapped a three-day losing streak, reclaiming the Rs 30,000 crore market capitalization mark and marking its largest single-day jump in six weeks.

Intraday performance and recent trends

The stock opened at Rs 217.85, slightly lower than its previous close of Rs 221.65, but strong buying pushed it to an intraday high of Rs 242.60, reflecting a gain of 9.45 per cent. As of late morning trading, the shares were up 7.7 per cent at Rs 238.55 apiece. Piramal Pharma had previously declined 12 per cent over the last three sessions and is down 10 per cent so far in January, marking its worst monthly performance since March 2023.

Analysts remain bullish

All 10 analysts covering Piramal Pharma maintain a "buy" rating on the stock. JM Financial has set the highest price target at Rs 340, while Jefferies recently revised its target upward to Rs 310 from Rs 260, citing expectations of sustained momentum in 2025. Analysts attribute the bullish outlook to the company’s strong presence in the Contract Development and Manufacturing Organization (CDMO) space and anticipated margin expansion driven by operating leverage.

Key drivers behind the rally

The stock's rebound can be linked to its potential in the CDMO sector, where increasing demand is expected to boost revenues. Additionally, analysts have highlighted the company’s efforts in improving operating efficiency, which could lead to enhanced profitability. The favourable outlook from brokerages like Jefferies and JM Financial has likely buoyed investor confidence.

Long-term prospects

While Piramal Pharma's recent rally is a positive sign, the stock remains under the Stage 1 Long-Term ASM (Additional Surveillance Measures) framework, which implies higher regulatory scrutiny. However, analysts are optimistic about the company’s ability to sustain growth in 2025, supported by a robust operational framework and strategic initiatives.

With the broader market sentiment remaining weak, Piramal Pharma's strong performance reflects its underlying growth potential and investor optimism, making it a key stock to watch in the pharma sector.