Strides Pharma saw its revenue for the September quarter drop 8 per cent year-on-year to Rs 736 crore as Covid-led manufacturing disruptions and pricing pressures on acute drugs in the US hurt sales. The pharma company registered a consolidated net loss of Rs 176 crore in Q2 of FY22 as compared to net profit of Rs 56.3 crore in the year ao period.
Dr R Ananthanarayanan, managing Director and CEO of Strides Pharma, said, “We have reported an operational breakeven in Q2FY22 enabled by a bounce back in other regulated markets, growing 27 percent QoQ.”
“While we have been able to retain volume share on our key products, we continued to witness price challenges in our portfolio during the quarter, magnified by concentration towards acute products,” he added.
A muted sales performance accompanied with a drop in gross margins and relatively higher operating costs has led to a negative operating leverage in the first half of FY22. The companies said that while cost measures have been initiated to improve operating leverage, the shift will be visible in the coming quarters.
Strides completed the strategic acquisition of the Chestnut Ridge site in the US, along with a portfolio of approved products, in the September quarter which will enable it to accelerate new product launches.
“We will start witnessing improvement in our US business starting Q3FY22 and will continue the growth momentum there on. Given the volatile dynamics we believe we will only be able to achieve our current year guided outlook for US in FY23,” the company said.
The company’s share price fell 8 per cent from Rs 551.45 at 1:40 PM to Rs 506.5 at 3:12 PM as a reaction to the earnings.