Sharekhan's research report on Strides Pharma Sciences
Strides Pharma Sciences (Strides) posted strong performance in Q2FY2023 with the fourth consecutive quarter of sequential improvement in OPM to 9.4%. Revenue grew by 24.3% y-o-y to Rs. 897.1 crore; adjusted PAT stood at Rs. 16.7 crore. US business registered one of the best quarterly performances, with revenue at $60mn. Management has guided for $250 mn revenue from the US for FY2023, which translates into strong growth. A strategic review of the other regulated market business has led to exit from low-margin businesses. The business is expected to return to historical levels with superior margins from Q3.
Outlook
The stock price has corrected sharply by ~35% from its 52-week highs and is trading at reasonable valuations of 17.3x its FY2024E earnings. We retain our Buy recommendation on the stock with an unchanged PT of Rs. 450.
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