In the past two months, the stock has rallied 64 per cent after the company reported strong performance across all business segments in the April-June 2020 quarter (Q1FY21) despite significant disruptions and ambiguity in the business environment due to Covid 19. The company delivered healthy operating leverage that led to a 920 basis points sequential EBITDA (earnings before interest, taxes, depreciation, and amortization) margin expansion with superior cash flows.
After posting an adjusted loss of Rs 27.4 crore in the January-March 2020 quarter (Q4FY20), Strides Pharma made a strong comeback in Q1FY21 with adjusted profit after tax of Rs 56 crore. This was on account of strong traction witnessed in the US/Other Regulated/Africa markets.
Analysts at Motilal Oswal Securities remain positive on the stock given the considerable improvement expected in return ratios over FY20–22 and attractive valuations. The brokerage firm increase its EPS estimate for FY21/FY22 by 19.6 per cent/14.2 per cent to factor a strong ANDA pipeline for the US market, good order-book visibility for the Other Regulated market, revival in Africa sales, and improved operating leverage
Meanwhile, according to bulk deals data, France-headquartered Societe Generale acquired 626,279 equity shares or 0.7 percent equity stake in Strides Pharma Science via open market transaction on September 8. The foreign portfolio investor (FPI) had purchased shares in the pharma company at Rs 612 per share.
However, Brookdale Mauritius International, which held 1.39 million shares as of June 2020, was the seller, which offloaded 626,279 shares in the company at Rs 612 per share, data shows.
Last week, Strides Pharma Science announced that its step-down wholly owned subsidiary, Strides Pharma Global, Singapore, has received approval for Prednisone Tablets USP, 1 mg from the United States Food & Drug Administration (USFDA). The product is a generic version Meticorten Tablets, 1 mg of Schering Corporation.
According to reports, the US market for Prednisone Tablets USP, 1 mg is approximately US$ 12 million. The product will be manufactured at the company's flagship facility at Bengaluru and will be marketed by Strides Pharma Inc. in the US market, it said.
At 03:04 pm; the stock was trading 12 per cent higher at Rs 680, as compared to 0.03 per cent rise in the S&P BSE Sensex. The trading volume jumped 1.5 times with a combined 7.3 million equity shares changing hands on the NSE and BSE so far.