Broker's call: Strides Pharma (Hold)

| Updated on March 17, 2020 Published on March 18, 2020

Strides Pharma Science Ltd logo   -  Website/strides

Geojit Financial Services

Strides Pharma (Hold)

CMP: ₹323.55

Target: ₹357

Strides Pharma science is an R&D-focussed, vertically integrated pharmaceutical company with an experienced management team and presence across multiple therapeutic segments.

Strides posted a 22 per cent growth in revenues in Q3FY20 (excluding Australia business which was shut down in FY19), led by strong performance in the US.

The US sales grew 62 per cent y-o-y (16 per cent q-o-q) during the quarter, with the move to front end sales paying dividends.

Other regulated markets saw 54 per cent in y-o-y growth in revenue, led by successful product launches, increasing market share and improved product management.

The company received an EIR from USFDA for the new manufacturing plant it acquired in Florida this year. This will help the company to scale up its private label business in the US.

We upgrade the rating to ‘hod’ with a target price of ₹357 based on a 7x FY22E EPS multiple, as we expect front end sales and the US revenues to drive growth.

Published on March 18, 2020
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