Buy Strides Pharma Science; target of Rs 530: Geojit
Geojit’s research report on Strides Pharma Science
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 business environment in key markets & portfolio expansion. We adjust our Revenue / PAT estimate for FY20E by 14%/21% resp. to factor sale of Australian business (~700crs).
However we forecast Rev/PAT to grow by 13/57% in FY21 on better performance from the US and value SS at a multiple of 18x on FY21E EPS and upgrade the rating to Buy from Accumulate.
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