Shares of Piramal Pharma surged over 5 percent on Friday ahead of the FTSE Rebalancing that is scheduled to take place today. The stock is likely to see inflows of $11.1 million as it will be included in the FTSE All Cap Index.

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On the other hand, brokerage firm Jefferies has recommended a buy rating on Piramal Pharma with a price target of Rs 115, which implies a potential upside of 25 percent from Thursday's closing level.

Jefferies said that the company has begun financial year 2024 on a very strong note with a healthy order book in its CDMO division, increasing FTE demand, and supply normalisation in complex hospital generics.

The brokerage also took a deep dive into recently announced NCE (New Chemical Entity) contracts. Piramal Pharma witnessed a significant pickup in order bookings in the March quarter compared to the previous three quarters. The orders received during the March quarter were a healthy mix of on-patent and generic product development and manufacturing.

Few Piramal Pharma customers announced that they have signed supply agreements with the company. TheracosBio announced a partnership for a new SGLT2 inhibitor, which has received the USFDA approval for use in both humans and cats. Additionally, Plus Therapeutics has signed a five-year agreement with Piramal Pharma for supply of Liposome intermediate.

Jefferies said that these recent order wins gives further confidence on Piramal Pharma seeing significant margin expansion in the current financial year. “Upside risk to our estimates could come from strong demand in CHG products,” the note stated.

Piramal Pharma saw an increase of 26 percent year-on-year in its March quarter revenue to Rs 1,285 crore, while net profit was at Rs 50.1 crore.

Shares of Piramal Pharma are trading 4.55 percent higher at Rs 96.31.