Buy Strides Pharma Science, target price Rs 500: ICICI Securities

ICICI Securities has buy call on Strides Pharma Science with a target price of Rs 500. The current market price of Strides Pharma Science is Rs 343.95.

Strides Pharma Science Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 3085.64 Crore) operating in Pharmaceuticals sector.

Strides Pharma Science Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Sale of services and Royalty Income for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 920.56 Crore, down -3.47 % from last quarter Total Income of Rs 953.62 Crore and up 23.78 % from last year same quarter Total Income of Rs 743.68 Crore. Company reported net profit after tax of Rs 63.74 Crore in latest quarter.

Investment Rationale
The brokerage raises revenue estimates by 4-5% over FY23-FY24E to factor-in higher sales from the US business. Subsequently, our FY24E EPS increases by 5.0%, but FY23E EPS surges ~79% due to a very low PAT base. Maintain BUY with a revised target price of Rs500/share, based on 15x Sep’24E EPS (earlier: Rs402/share based on 15x FY24E EPS). Key downside risks: Slowdown in recovery of US sales, and regulatory hurdles.

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.