homemarket Newsstocks NewsHere is why Strides had its worst day in two years despite multi quarter high margin

Here is why Strides had its worst day in two years despite multi-quarter high margin

Here is why Strides had its worst day in two years despite multi-quarter high margin
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By Ekta Batra  Jan 24, 2023 7:00:11 PM IST (Published)

Shares of Strides Pharma had their worst day in two years post its December quarter earnings.

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Shares of Strides Pharma Ltd. ended more than 6.5 percent lower on Tuesday, despite the company's December quarter EBITDA margin improving to a multi-quarter high.

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Despite that, the company reported a net loss of Rs 80 crore during the quarter. Strides attributed the loss to its Joint Venture and an inventory write-off due to Covid-19.
For the December quarter, the company's revenue increased nearly 9 percent to Rs 864.8 crore. Its US business saw the best-ever quarterly performance at $63 million due to improved traction in base products as well as newly launched ones. The US business contributes to nearly 60 percent of the overall revenue.
Regulated markets also crossed $100 million in revenue for the first time ever. These markets contributed 36 percent to the overall sales.
EBITDA margin of 13.5 percent this quarter were aided by cost optimisation.
The company also received related deferred consideration worth Rs 519.3 crore from the Arrow transaction. The company will utilise these proceeds towards debt reduction as the focus is on bringing the net debt-to-EBITDA ratio below 3x.
Strides has guided for gross debt reduction worth Rs 1,000 crore in the current financial year. As of date, the company's gross debt reduced to Rs 2,205.4 crore from Rs 2,792.1 crore at the end of the previous financial year.
However, the company's emerging market revenue declined close to 80 percent during the quarter and 74 percent on a sequential basis.
Shares ended 6.6 percent lower at Rs 315.
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