Strides Pharma Shares Surge Over 13% on Strong September Quarter Results and Improved Margins

Strides Pharma's net profit surged by 82% year-on-year to ₹131.5 crore for the September quarter, up from ₹72.2 crore in the same period last year. Revenue saw a modest increase of 4.6% year-on-year, reaching ₹1,221 crore. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose by a significant 25.4% to ₹232 crore compared to the previous year. This improvement was accompanied by an expansion in EBITDA margins, which grew by over 300 basis points to 19% from 15.8%. Gross margins also improved substantially, expanding by 500 basis points to 57.8%.

The company successfully reduced its net debt by ₹47 crore on a sequential basis, managing this despite currency headwinds and ongoing capital expenditure investments.

For the crucial US market, Strides Pharma reported sales of $73 million, largely consistent with the prior year's quarter. The management remains optimistic, reiterating its target of achieving nearly $400 million in US revenue by fiscal years 2027-2028. In Europe, the company is onboarding large pan-EU partners, indicating strong deal momentum. The UK business is expected to see growth in the latter half of the fiscal year, driven by planned product launches.

Strides Pharma highlighted three key drivers for its European business: expansion of its product portfolio and acquisition of new customers, conversion of its strong pipeline of new opportunities, and continued momentum in new product filings.

Following the earnings announcement, Strides Pharma shares traded approximately 11.6% higher at ₹950. The stock has already seen a substantial gain of 35% year-to-date.

Impact: This robust financial performance and positive outlook are likely to boost investor confidence in Strides Pharma, potentially leading to sustained stock price appreciation and further strengthening its market position in key geographies like the US and Europe. The operational improvements and debt reduction also signal financial health. Rating: 8/10

Explained Terms: EBITDA: Earnings Before Interest, Tax, Depreciation, and Amortisation. It is a measure of a company's operating performance. Basis Points: A basis point is one-hundredth of one percent. For example, 100 basis points equals 1%. (300 basis points = 3%)