Strides Pharma records net loss of Rs 122 cr in Q3, revenue drops 5%

Company expects growth momentum in the US to pick up in coming quarters driven by new product launches

Strides Pharma has registered a net loss of Rs 122 crore in the December quarter (Q3), compared to a net profit of Rs 378 crore in the year-ago period. The Mumbai-based company’s revenue dropped 5 per cent to Rs 794 crore in Q3 on a year-on-year basis.

R Ananthanarayanan, Managing Director and CEO, said, “In Q3, while we have delivered an 8 per cent sequential revenue growth for our business, operating leverage continues to be subdued. Our US business has returned to growth after two quarters of decline, growing 13 per cent sequentially to $38 million in Q3”. 

Strides Pharma completed the acquisition of the Chestnut ridge site in the US during the quarter and the integration is on track, said the company. The facility also completed a successful FDA inspection that ended on February 8, 2022 with 2 minor observations. 

“While the site contributed to revenues only for a few days during the quarter, the plant related operating costs were part of our P&L starting October’21 leading to some level of negative operating leverage during the quarter. We expect the growth momentum in the US to pick up in coming quarters driven by new product launches from the combined portfolio,” said Ananthanarayanan.

Emerging markets revenues were at $29 million for Q3 of FY22 versus $28 million in the preceding quarter – and this part of the business contributed 27 per cent of consolidated revenues in Q3.

Growth in emerging markets business was driven by institutional business that benefited from a healthy customer offtake. Meanwhile, the Africa business declined during the quarter owing to several countries’ having high Covid incidence impacting demand.

Other regulated markets revenues at $40 million for Q3 of FY22 versus $38 million  in Q2 of FY22. These  geographies contributed 37 per cent of consolidated revenues in the December quarter.

“While the freight rates continue to stay elevated versus historical levels, a superior supply chain execution has enabled a shift towards higher sea shipments helping contain our logistics cost QoQ. Logistics cost during the quarter was at Rs 60.6 crore versus Rs 89.7 croe in Q2 of FY22 and Rs 46crore  in Q3 of FY21,” the company said.