On September 11, Piramal Pharma shares experienced a significant surge of over 5%, reaching a record high of ₹243.99. This notable increase in stock value has been driven by a combination of strong growth prospects and heightened trading volumes, reflecting robust investor confidence in the company's future.

Trading Volumes and Stock Performance

At 10:33 am, Piramal Pharma shares were trading at ₹238.70 on the NSE, just below the record high. The day’s trading volume saw two crore shares exchanged, which is double the one-month daily average of one crore shares. This substantial trading activity underscores the strong investor interest and positive sentiment surrounding the stock.

Impact of the US Biosecure Act

The surge in Piramal Pharma’s stock is closely tied to the recent developments related to the US Biosecure Act. This draft legislation aims to restrict the US government from contracting with or providing grants to companies involved with certain biotechnology firms of concern, specifically naming five Chinese companies: BGI Genomics, MGI Tech, Complete Genomics, WuXi AppTec, and Wuxi Biologics.

This legislative move has sparked optimism that contracts in the Contract Development and Manufacturing Organization (CDMO) sector may shift towards Indian companies, such as Piramal Pharma. The passage of this bill through the US House of Representatives has set expectations for a potential increase in opportunities for Indian firms, as US drugmakers explore alternative supply bases outside of China.

In an interaction with CNBC-TV18, Piramal Pharma’s management revealed that they have noticed a rise in exploratory discussions and customer inquiries in response to the Biosecure Act. However, the firm also noted that no major decisions have been finalized as yet.

Medium-Term Revenue Expectations

Analysts predict that the impact of the Biosecure Act will be felt in the medium term, with the most significant effects expected in the small molecules segment. Bank of America Securities anticipates that Indian companies could see revenue impacts from this shift within 12-24 months. The prospect of US companies moving their manufacturing bases away from China could provide a substantial boost to Indian CDMO firms, with Piramal Pharma being a notable beneficiary of this trend.

Despite the medium-term timeline for revenue impacts, the current optimism has already translated into impressive gains for Piramal Pharma, with shares delivering a 30% increase over the past month.

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