Buy Strides Pharma Science, target price Rs 402: ICICI Securities

ICICI Securities has buy call on Strides Pharma Science with a target price of Rs 402. The current market price of Strides Pharma Science is Rs 338.65. Time period given by analyst is one year when Strides Pharma Science Ltd. price can reach defined target.

Strides Pharma Science Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 3026.83 Crore) operating in Pharmaceuticals sector.

Strides Pharma Science Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Sale of services, Export Incentives and Royalty Income for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 953.62 Crore, up .16 % from last quarter Total Income of Rs 952.08 Crore and up 35.86 % from last year same quarter Total Income of Rs 701.90 Crore. Company reported net profit after tax of Rs -78.94 Crore in latest quarter.

Investment Rationale
Strides Pharma Science’s (Strides) Q1FY23 performance beats estimates on all fronts. Revenue grew 36.6% YoY to Rs9.4bn (I-Sec: Rs8.7bn) led by strong growth in institutional business. US revenue grew 4.5% QoQ to US$46mn during the quarter as estimated. Institutional business grew 40.2% QoQ (+108% YoY) to Rs2bn. Higher US and institutional sales QoQ drove operating leverage, supporting the 60bps QoQ EBITDA margin improvement to 5.4% (I-Sec: 4.8%). The company has reiterated its target of achieving US sales guidance of US$250mn in FY23, to be driven by new product launches and incremental sales from the Endo Pharma portfolio. Expected recovery in the US business and reasonable valuations make the stock attractive. Maintain BUY with a revised TP of Rs402/share.

Promoter/FII Holdings
Promoters held 30.6 per cent stake in the company as of 31-Mar-2022, while FIIs owned 24.61 per cent, DIIs 13.87 per cent.