HDFC Securities is bullish on Strides Shasun has recommended buy rating on the stock with a target price of Rs 480 in its research report dated 09 Aug 2018.
HDFC Securities' research report on Strides Shasun
Improved performance in US was the key takeaway from Strides’ 1QFY19 result, although overall operational numbers remained weak. Revenue at Rs 6.6bn was flat YoY and QoQ. EBITDA margin was weak too at 12.2% v/s 13% in 4QFY18. The company reported loss of Rs 42mn in 1QFY19; sticky depreciation and interest cost to the tune of Rs 860mn eroded the profits.
The additional US$ 15-20mn quarterly revenues from key products can translate into Rs 500-600mn incremental EBITDA in coming quarters, taking overall company margins to ~16-17%. Upgrade to BUY with a TP of Rs 480 (15x FY20E+ Rs 30/sh for biopharma).
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