Strides Pharma’s Consolidated Profit Up by 80.6%

Mumbai, 29 July 2025: Strides Pharma Science Ltd (NSE: STAR, BSE: 532531) has posted a sharp 80.6% year-on-year increase in consolidated operational profit after tax (PAT) at ₹1,140 crore for the first quarter of FY26. The growth was driven by an expansion in margins and a solid performance across major regulated markets, particularly in the United States, the company said.

Robust Growth in Profit Backed by Healthy Margins and Operational Focus

For Q1FY26, the company recorded consolidated revenue of ₹1,119.7 crore, up 6.2% from the year-ago period. Gross margin stood at ₹675.5 crore, reflecting an 11.7% rise. EBITDA grew by 14.8% to ₹218.1 crore, resulting in a 150 basis point expansion in EBITDA margin to 19.5%.

Operational PAT surged to ₹114 crore from ₹63.1 crore in Q1FY25. Operational earnings per share (EPS) also rose sharply to ₹12.4 from ₹6.9. However, reported PAT came in at ₹105.6 crore, down 34.6% year-on-year, due to exceptional items related to past demergers.

Notably, gross and EBITDA margins expanded significantly-by 300 bps and 150 bps respectively-highlighting improved cost control and product mix.

US Market Performance Lifts Overall Revenue Despite Drop in Donor-Funded Segment 

• United States: Revenue rose 7% YoY to $71 million, driven by a resilient base business and a wide commercial portfolio of 70 products.
• Other Regulated Markets (Ex-US): Contributed $42 million, marking a 9.2% increase YoY, supported by strong B2B traction in Europe, despite pricing headwinds in the UK.
• Growth Markets (Africa, LATAM, MENA, APAC): Revenue climbed 32.2% YoY to ₹140.2 crore, propelled by new product introductions in Africa.
• Access Markets (Donor-Funded): Revenue declined steeply by 72.9% YoY to ₹14.5 crore, reflecting a sharp reduction in donor funding and marking the weakest quarter for this segment.

Lower Debt and Higher Returns Reflect Improved Financial Discipline

As of June 2025:

• Net debt reduced to ₹1,495.8 crore from ₹1,522.2 crore in March 2025
• Operating cash flow stood at ₹117.7 crore
• Finance costs declined significantly to ₹40.6 crore from ₹59.8 crore YoY
• Net debt-to-EBITDA ratio improved to 1.8x from 3.5x in FY24
• Return on Capital Employed (ROCE) rose to 15.1%, up from 9.1% in FY24

Focused R&D, Strategic Relaunches and Nasal Spray Filing Strengthen Outlook

Managing Director and Group CEO, Badree Komandur, stated:

“We are pleased to report a solid start to the year, marked by consistent growth and enhanced profitability. Our focus on cost management and diligent execution has enabled us to deliver robust results. The company will enhance its R&D efforts during the year to drive sustainable long-term growth.”

Strides reaffirmed its medium-term goal to achieve $400 million in US revenue by FY27–28. This will be driven by the aggressive relaunch of 60 dormant Abbreviated New Drug Applications (ANDAs). The company has also diversified beyond generics, having filed its first nasal spray under the 505(b)(2) route in the US. Growth from Europe’s B2B segment and emerging markets is expected to offset short-term volatility in donor-funded programs.

Key Metrics Highlight Strong Profitability Amidst Below-Par Growth Trends

Strides Pharma’s current market capitalisation stands at ₹8,884.9 crore, placing it above the industry median. Although revenue growth YoY (3%) and TTM revenue growth (10.8%) remain below industry norms, the company boasts one of the highest net profit TTM growth rates at 5,316.8%, and a quarterly net profit growth of 41.9%, positioning it as a top performer on the profitability front.

Other highlights include:

• Price-to-earnings (P/E) ratio: 24.5
• Price-to-book ratio: 3.9
• Piotroski Score: 7 (strong financials)
• Return on Equity (ROE): 140.8%
• Return on Assets (RoA): 59.4%
• Institutional holding: 41.33%, with a slight decline of 0.72%
• Relative return vs Nifty50: 43.4% for the quarter
• Relative return vs sector: 36.1%

Despite falling short in growth metrics, Strides remains a market leader in returns, efficiency, and financial discipline.

Stock Surges 4.3% After Results, Touches 52-Week High Intra-day

Shares of Strides Pharma Science Ltd (NSE: STAR) surged 4.3% intraday following the Q1FY26 earnings release, rising ₹39.65 to close at ₹962.00 on 29 July 2025 at 2:53 pm IST. The stock touched a new 52-week high of ₹972.00 and opened at ₹925.00, reflecting investor confidence driven by strong quarterly financials, improved margins, and strategic future outlook.

Strides Pharma Science Ltd is a BSE and NSE-listed pharmaceutical company headquartered in Bengaluru. It operates multiple manufacturing facilities across India, Italy, Kenya, and the United States. With a core focus on complex generics and regulated markets, Strides has commercial operations in over 100 countries and maintains a leading presence in several therapeutic categories.

REF: https://nsearchives.nseindia.com/corporate/STRIDES_532531_29072025123847_3SEIntimationPressRelease.pdf

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