Pharma shares surge post Q2 results

Strides Shasun, Jubilant Life Sciences and Sun Pharma Advanced Research were up between 5% and 12%.

Shares of select pharmaceutical companies have surged by up to 12% on BSE in intra-day after they reported robust earnings for the quarter ended September 30, 2016 (Q2FY17).

Strides Shasun, Jubilant Life Sciences and Sun Pharma Advanced Research (SPARC) were up between 5% and 12%. Syngene International, Cadila Healthcare and Abbott India too, up more than 5% each on BSE.

At 02:54 pm, the S&P BSE Healthcare index was up 1% as compared to 0.22% rise in the S&P BSE Sensex.

Strides Shasun has rallied 12% to Rs 1,054 after the company reported a more than doubled consolidated net profit of Rs 74.09 crore for Q2FY17. It had posted a profit of Rs 35.81 crore in year ago quarter. Total income from operations grew 33% at Rs 953 crore on year on year basis.

EBITDA (earnings before interest, taxes, depreciation, and amortization) margin improved 100 basis points to 18% from 17%.

The company has guided EBITDA between Rs 440 crore to Rs 475 crore for H2FY17 for the pharmaceutical business (excludes biotech). It had reported EBITDA of Rs 364 crore in H2FY16.

SPARC surged 9% to Rs 368 after posted net profit of Rs 15 crore in Q2FY17 against a net loss of Rs 18 crore in the corresponding quarter of previous fiscal.

Jubilant Life Sciences up 6% to Rs 690 after consolidated net profit rose 14.52% to Rs 145 crore in Q2FY17.

In its outlook, the company said that in the second half of the financial year ending March 2017, it is confident of improving its performance. In pharmaceuticals segment, profitability is expected to be higher on account of new product launches in generics and specialty products, growth in rest of the world (ROW) business and ramp-up of operations and new customer acquisitionsin CMO of Sterile Injectables.

The company's focus will be on generating operating cash in life science ingredients by retrofitting plants for better capacity utilization with new product introductions. In drug discovery solutions, the focus will be on revenue growth aided by strong pipeline and onboarding of new customers. The company's endeavours to reduce debt through operating cash flow and to improve key financial ratios will continue, he added.