Motilal Oswal - Strides Pharma Science (STAR) MOSL: STRIDES PHARMA (Buy)-Lack of launches / COVID disruption leads to weak 1QFY22

Report

Motilal Oswal

Tushar Manudhane

MOSL: STRIDES PHARMA (Buy)-Lack of launches / COVID disruption leads to weak 1QFY22

STRIDES PHARMA: Lack of launches / COVID disruption leads to weak 1QFY22

(STR IN, Mkt Cap USD0.9b, CMP INR733, TP INR840, 15% Upside, Buy)

Strides Pharma (STR) reported unexpected operational loss in 1QFY22 on lower demand, higher competitive intensity in US Generics, and low operating leverage. This was exacerbated by the impact on production and supply due to a severe second COVID wave in Bengaluru.
As a quick mitigation plan to increase product launches, it aims to acquire a portfolio of differentiated ANDAs, including 20 already commercialized products and a manufacturing facility from Endo Pharma in the US. The acquisition would double the approved product portfolio and add differentiated products and manufacturing capabilities for STR.
Considering (a) sharp price erosion in the base portfolio for the US market, (b) a disappointing 1QFY22 performance, and (c) gradual improvement expected from 2HFY22, we expect STR to witness loss in FY22. Hence, we lower our EPS estimate for FY23 by 20%. We value STR on an SOTP basis (EV/EBITDA of 11x for Regulated Markets, 7x for Emerging Markets / Institutional) and add an investment value of 33% stake in Stelis (recent conclusion of Series B/C funding pegs post-money valuation at USD350m). Maintain Buy.

08/08/2021 10 EN

Underlying

Strides Pharma Science

Strides Pharma Science Ltd, formerly Strides Shasun Limited, is a vertically integrated global pharmaceutical company. The Company is engaged in the development and manufacturing of active pharmaceutical ingredients (APIs) and formulations, as well as biotech. Its business segments include Pharmaceutical and Biotech businesses. Its geographical segments are Africa, Australasia, North America and Europe, South and Central America, India and Others. The Company focuses on developing complex pharmaceutical products across therapeutic segments. The Company's products include general tablets, hard gelatin capsules, soft gelatin capsules, sachets, dry powders, dry syrups, potent drugs, semi solids, ointments and creams. It is also involved in supplying generics to hospitals approved by the National Health Service (NHS) and over-the-counter (OTC) products through retail outlets. It operates approximately 10 facilities, which are diversified across Asia, Africa and Europe.

See profile

INE939A01011 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

See profile

Analysts

Tushar Manudhane

Other Reports on these Companies

TheScreener

Increased risk weighs on STRIDES PHARMA SCIENCE, penalising its rating down to Slightly Negative

The independent financial analyst theScreener just lowered the general evaluation of STRIDES PHARMA SCIENCE (IN), active in the Pharmaceuticals industry. As regards its fundamental valuation, the title still shows 2 out of 4 possible stars. Its market behaviour, however, has slightly deteriorated and will be qualified as risky moving forward. theScreener considers that these new qualifications justify an overall rating downgrade to Slightly Negative. As of the analysis date March 25, 2022, the closing price was INR 363.60 and its target price was estimated at INR 298.55.

Free Trial

March 26, 2022 March 26, 2022 1 EN

IDFC Securities

Management Speak: Strides Pharma Science (Outperformer) - Aiming high

Presented are key takeaways from the analyst day/plant visit organised by Strides Pharma Science to provide perspectives on its new business vertical, Stelis Biopharma, and medium-term outlook for the consolidated entity. We met Mr Arun Kumar, Founder and CEO Strides, Mr Badree Komandur, Group CFO and Executive Director Strides, and the entire senior management team of Stelis Biopharma. Strides – aggressive medium-term growth aspirations: Management presented its detailed growth strategy involving niche oral solids (60%+ GMs), scale-up of private label/OTC, restart of steriles business, bio-b...

January 31, 2020 January 31, 2020 14 EN

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality (HOMEFIRS IN, Mkt Cap USD0.9b, CMP INR802, TP INR1025, 28% Upside, Buy) HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ, led by investments in new branches and resultant higher employee expenses. Disbursements grew 36%...

EUR 120.00

October 21, 2022 October 21, 2022 12 EN

Aliasgar Shakir

Aliasgar Shakir

MOSL : SHOPPERS STOP: Ticking the right boxes

. SHOPPERS STOP: Ticking the right boxes (SHOP IN, Mkt Cap USD1b, CMP INR780, TP INR805, 3% Upside, Neutral) Aided by price hikes, SHOP reported a healthy 19% revenue growth in 2QFY23 from pre-COVID levels (8% beat) on healthy (+10%) SSSG and sustained volumes. EBITDA grew 2.3x YoY (22% over pre-COVID levels), with a 540bp margin improvement. 1) A strong recovery in revenue, backed by an improved pricing; 2) expansion within the Beauty and Private Label segment; and 3) healthy annual 12/15 store additions for SHOP/Beauty are expected to drive business growth going forward. We expect a r...

EUR 120.00

October 21, 2022 October 21, 2022 13 EN

Tushar Manudhane

Tushar Manudhane

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities (ERIS IN, Mkt Cap USD1.2b, CMP INR708, TP INR860, 21% Upside, Buy) Eris Lifesciences (ERIS) delivered better than expected 2QFY23 performance, led by superior traction in new launches and improved operating leverage. ERIS is notonly sustaining the momentum in its recently launched products, but it is also preparing itself for an aggressive pace of new introductions. We reiterate our earnings estimate for FY23/FY24 and continue to value ERIS at 22x 12M forward earnings to arrive at a price target of INR860. We re...

EUR 120.00

October 21, 2022 October 21, 2022 11 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

MOSL: STRIDES PHARMA (Buy)-Lack of launches / COVID disruption leads to weak 1QFY22

Increased risk weighs on STRIDES PHARMA SCIENCE, penalising its rating down to Slightly Negative

Management Speak: Strides Pharma Science (Outperformer) - Aiming high

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe