743.10 14.00 (1.92%)
NSEOct 23, 2020 03:31 PM
The 5 reports from 2 analysts offering long term price targets for Strides Pharma Science Ltd. have an average target of 567.50. The consensus estimate represents a downside of -23.63% from the last price of 743.10.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-08-06||Strides Pharma Scien..||Motilal Oswal||525.30||650.00||525.30 (41.46%)||Target met||Buy|
We roll our price target to INR650 on a 12M forward SOTP basis (8x EV/EBITDA for the US / Other Regulated markets, 6x for Emerging Markets, and 5x for Institutional). Considering this and its increased market share in commercialized products, we expect US sales to revive and exhibit a 6% CAGR to USD270m over STR recorded the highest ever quarterly revenue of INR2.6b in the Other Regulated market, implying growth of 53% on a YoY basis in 1QFY21. We expect the business to exhibit a 23% CAGR in sales to INR12.6b over STR exhibited 17% YoY / 47% QoQ growth in the Emerging Markets business, led by an increase in primary sales in Africa. in Other Regulated and 52% sales CAGR in Emerging Markets, supported by our price target to INR650 on a 12M forward SOTP basis (8x EV/EBITDA for US / Other Regulated, 6x for Emerging Markets, and 5x for Institutional).
|2020-05-26||Strides Pharma Scien..||Geojit BNP Paribas||398.45||485.00||398.45 (86.50%)||Target met||Accumulate|
Geojit BNP Paribas
We upgrade our rating to Accumulate based on 10x FY22 EPS with a target of price of Rs.485 as new launches in U.S and other regulated markets will drive growth. Revenues were down 26% yoy and down 16% qoq mainly on...
|2020-03-17||Strides Pharma Scien..||Geojit BNP Paribas||304.45||357.00||304.45 (144.08%)||Target met||Hold|
|2020-01-30||Strides Pharma Scien..||Motilal Oswal||464.30||550.00||464.30 (60.05%)||Target met||Buy|
Further, the company appears set to build biopharma and injectables as new levers of growth over the next 3-4 years. We expect ramp-ups to progress well on the back of new launches and increased traction in existing products. We raise our EPS estimate by 21%/12.6%/8.4% for FY20/21/22 to factor in strong traction in US generics and other regulated markets. Re-iterate led by US business (+62% YoY/16% QoQ to INR4.6b or USD66m) and other regulated markets business (+54% YoY to INR2.2b). However, emerging market sales declined 62% YoY to INR566m. Gross margin (GM) expanded 1,360bp YoY/620bp QoQ to 58.2%, led by a better product mix and partly on a low base of 3QFY19. Accordingly, EBITDA margin improved 420bp QoQ/1,200bp YoY to 24.7% Adj. PAT grew at a higher rate of ~330% (INR794m v/s our est.
|2019-12-11||Strides Pharma Scien..||Motilal Oswal||367.75||440.00||367.75 (102.07%)||Target met||Buy|
11 December 2019 After delivering 31% CAGR in US generics revenue over FY17-19, STR appears well positioned to sustain this momentum led by its robust product pipeline (~40 under development/targets to file 20 ANDAs every year) and superior execution in approved products (led by no failure to supply, integrated APIs and cost leadership). The two-pronged strategy of (a) increasing penetration of the already approved products by entering new territories and (b) further building the product portfolio led to strong revenue growth of 67% YoY from other regulated markets in 1HFY20. Healthy order book, opportunities from product shortage (particularly in the UK) and new launches in the EU will provide STR with a good platform to grow business in the other regulated markets over the next 2-3 years (we forecast at least 50% revenue CAGR over the next two years). STR is building multiple levers in the form of a healthy ANDA pipeline and a specialized portfolio of injectables/bio pharma to deliver strong earnings growth over the next 3-4 years.
|2019-08-16||Strides Pharma Scien..||Geojit BNP Paribas||412.95||391.00||412.95 (79.95%)||Target met||Sell|
Geojit BNP Paribas
US business grew by 125%QoQ driven by healthy performance in the base portfolio with no major price erosions. Remediation work has started in response to the warning letter (WL) by USFDA on Puducherry plant (~7% of the total revenue of SS) with the management transferring production to other locations. Exit from Arrow investments at Australia got successfully completed with the proceeds reducing the debt significantly ~Rs1000cr. Regulated markets witnessed a modest growth (13%YoY) while...
|2019-07-30||Strides Pharma Scien..||HDFC Securities||371.15||650.00||371.15 (100.22%)||Buy|
With the US biz de-risked and traction gained in other segments on the back of additional capacities, we expect ~6% CAGR over FY19-21E in revenue (~20% adjusted for Aus divestment). Ramp up in US and reg. markets will drive profitability, while reduced depreciation and interest cost (Aus divestment) will enable 146% PAT CAGR on a low base. We remain optimistic of an improved operating performance and are relieved to see the reduction in debt and a healthier balance sheet. The valuations remain attractive at 12.2/9.0x FY20/21E P/E. We maintain BUY on Strides Pharma (STR) following an in-line 1QFY20. The uptick in US continues, while other segments continue to perform well. Our TP is unchanged at Rs 650 (15x FY21E EPS + Rs 30/sh for biopharma).
|2019-05-15||Strides Pharma Scien..||Geojit BNP Paribas||418.70||401.00||418.70 (77.48%)||Target met||Sell|
Geojit BNP Paribas
Official action initiation report by USFDA on Puducherry plant (~7% of the total revenue of SS) was an unexpected event. The management is optimistic of transfer of production to other locations (5 of 6 products). US business grew by 31%QoQ driven by healthy performance in the base portfolio with no major price erosions and strong filing momentum (~21). Australian business saw a flat growth rate with a total of 18 new releases in FY19 while they received shareholders approval to exit Arrow investments which is expected to pay ~Rs1500cr upfront once effected....
|2019-05-13||Strides Pharma Scien..||HDFC Securities||436.00||570.00||436.00 (70.44%)||Buy|
With the recent acquisitions, additional 12-15 product launches and return of partnered products, we believe Strides can achieve US$ 215mn in US revenues for FY20E (a growth of 22% YoY). However, the management's guidance stands at US$ 240mn in US revenues for FY20E. The significant ramp up in the US to drive ~170bps EBITDA margin expansion over FY20-21. Additionally, the reduction in debt post Aus biz sell off will lead to annual savings of Rs 1.7bn in interest cost and amortization, and enable 5x YoY eps growth over FY21E. The US revival and earnings growth, along with an expected improvement in balance sheet, enable us to maintain our positive stance. We maintain BUY on Strides Pharma (STR) following a bumper 4QFY19 driven by US revival. Our TP is revised at Rs 570/sh (15x FY21E EPS + Rs 30/sh for biopharma) following a 9% cut in FY21E EPS to account for higher interest cost on elevated debt at Rs 31bn.
|2019-05-11||Strides Pharma Scien..||Motilal Oswal||482.20||635.00||482.20 (54.11%)||Buy|
decline in sales, dragging growth to some extent. Gross margin (GM) shrank 280bp YoY to 53.5%. However, EBITDA margin expanded 500bp YoY to 18.9% (our estimate: 15.9%), led by a 230bp/560bp YoY reduction in employee/other expenses. Sequentially, both aforementioned expenses were stable, resulting in 280bp expansion in EBITDA margin. Loss in JV/associates hurts PAT: Higher interest cost (INR627m v/s INR501m QoQ/INR455m YoY) was offset by increased other income and extraordinary income (associated with forex gain and revaluation of investment)....
|2019-01-31||Strides Pharma Scien..||Geojit BNP Paribas||459.50||530.00||459.50 (61.72%)||Buy|
Geojit BNP Paribas
Strides Pharma science (SS) is a R&D; focussed, vertically integrated pharmaceutical company with an experienced management team and presence across multiple speciality therapeutic segments. SS to exit Australian business for ~394m AUD and a new supply deal will be struck in its place with Arrotex (Arrow- Apotex merged entity). More focus to the US markets as they are witnessing strong business momentum driven by new product launches. Regulated market saw high growth rate (55% YoY) driven by better...
|2019-01-30||Strides Pharma Scien..||HDFC Securities||479.80||585.00||479.80 (54.88%)||Buy|
Maintain BUY with a TP of Rs 585 (15x Dec-20E EPS + Rs 30/sh for biopharma). Strides reported a good set of numbers with revenue at Rs 7.9bn, up 6/8% YoY/QoQ and 5% ahead of our estimates. Revenue growth was largely driven by scale up in the US business. EBITDA came in at Rs 1.2bn with margin at 16%, down 150bps YoY and up 240bps QoQ. The sequential margin expansion was on account of higher US sales; consistent with our expectation. Reported PAT at Rs 2.9bn (+236% YoY) includes a one-time payment related to Mylan deal. Adjusting for which, PAT was 22% ahead of our estimates at Rs 239mn.
|2019-01-29||Strides Pharma Scien..||Motilal Oswal||490.60||590.00||490.60 (51.47%)||Buy|
Strides Pharma (STR) has decided to sell its entire stake in Arrow (Australian business) to Apotex for a consideration of AUD394m (US282m). The stake sale -which implies an attractive valuation of 19x EV/EBITDA - would enable STR to reduce its debt by at least USD160m.
|2018-11-15||Strides Pharma Scien..||Geojit BNP Paribas||457.45||507.00||457.45 (62.44%)||Target met||Accumulate|
Geojit BNP Paribas
Strides Shasun (SS) is a R&D; focussed, vertically integrated pharmaceutical company with an experienced management team and presence across multiple speciality therapeutic segments. Q2FY19 revenue grew by 10% QoQ due to higher sales growth in the US(~27%) and good performance from Africa (49%QoQ). Australian and Regulated markets witnessed healthy growth of 12%&52% (YoY) led by steady margins and better pricings. Change in partnership model in the US (generic) will further improve...
|2018-11-01||Strides Pharma Scien..||HDFC Securities||426.40||480.00||426.40 (74.27%)||Target met||Buy|
Maintain BUY with a TP of Rs 480 (15x Sep-20E+ Rs 30/sh for biopharma). Strides continued to gain traction in the US and other regulated markets, which offset the further slump seen in the institutional business as compared to the previous quarter. Revenue was reported at Rs 7.3bn, down 4.7% YoY/ up 10.4% QoQ. EBITDA at Rs 996mn saw a sequential jump of 23% with margin at 13.6% (up 142bps QoQ).
|2018-08-14||Strides Pharma Scien..||HDFC Securities||419.05||419.05 (77.33%)||Not Rated|
A significant debt reduction, if achieved, over the next two years could play a vital role in improving valuation multiple with peers trading at over 1.5x price/sales. Solara Active Pharma Sciences (Solara) was incorporated in February 2017. The select API business of Strides Shasun and Human API business of SeQuent were demerged from their parent companies and merged to form Solara, which is operating as a Pure Play API manufacturing company. This brings Solara over three decades of experience in the API business.
|2018-08-09||Strides Pharma Scien..||HDFC Securities||425.50||480.00||425.50 (74.64%)||Target met||Buy|
Upgrade to BUY with a TP of Rs 480 (15x FY20E+ Rs 30/sh for biopharma). 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.
|2018-08-09||Strides Pharma Scien..||Geojit BNP Paribas||425.50||480.00||425.50 (74.64%)||Target met||Buy|
New Blueprint for growth to bring back momentum Strides Shasun (SS) is a R&D; focussed, vertically integrated pharmaceutical company with an experienced management team and presence across multiple speciality therapeutic segments. Higher emphasis on direct business in US along with focus on B2C model and operating leverage generation to attract growth. Leadership position in Australia post Apotex merger to secure the business from competition due to high entry barriers....
|2018-08-08||Strides Pharma Scien..||Motilal Oswal||413.95||481.00||413.95 (79.51%)||Target met||Buy|
8 August 2018 STRs revenue was stable YoY at INR6.6b (our estimate of INR6.3b). Growth was led by Australia (+18% YoY to INR2.3b) and the US (+13% YoY to INR1.7b) businesses, offset by de-growth in Institutional (-29% YoY) and Africa (-35% YoY) businesses. Gross margin expanded 200bp YoY to 48.7% on account of a better product mix and a favorable currency impact. Other operating expense rose 60bp YoY, restricting EBITDA margin expansion to 140bp YoY (to 12.2%). Though EBITDA was up 13% YoY, STR reported a loss of INR43m (our estimate of a profit of INR157m), largely due to lower other income, higher depreciation and a loss in JV/associates. STR on track to bring 50% of the partnered business in the US to own front-end by FY19. Due diligence in progress for the merger of Arrow and Australia business of Apotex. The transaction is under review by Australia Competition and Consumer Commission (ACCC).
|2018-05-20||Strides Pharma Scien..||HDFC Securities||379.35||420.00||379.35 (95.89%)||Target met||Neutral|
Downgrade to NEUTRAL, with a TP of Rs 420 (15x FY20E + Rs 30 for Biopharma). Unexpected price cuts by competitors in two of the key products (Potassium citrate and gLovaza) sold by Strides Shasun (STR) in the US, led to a sharp drop in US revenues in 4QFY18, which halved from US$ 42mn in 3QFY18. Management admitted that they were caught unaware on unsold stocks with distribution partners, who did not liquidate as prices cracked. With this inventory still in stock, STR is likely to report similar bad US revenues for the next two quarters. This development is totally contrary to our expectation that these two products would scale up to US$ 3-5mn/qtr each in the absence of competition.