Buy Strides Pharma, target price Rs 650: Motilal Oswal

Strides Pharma Science Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 4743.50 Crore) operating in Pharmaceuticals sector.

Agencies
Strides Pharma Science Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 4743.50 Crore) operating in Pharmaceuticals sector.
Motilal Oswal has given buy rating to Strides Pharma with a target price of Rs 650. The share price moved up by 0.03 per cent from its previous close of Rs 534.50. The stock’s last traded price is Rs 534.65.

Strides Pharma Science Ltd., incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 4743.50 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 30-06-2020, the company has reported a Consolidated sales of Rs 781.80 Crore, up 26.37 % from last quarter Sales of Rs 618.64 Crore and up 14.00 % from last year same quarter Sales of Rs 685.80 Crore Company has reported net profit after tax of Rs 122.80 Crore in latest quarter.

strides-graph

Investment Rationale
The brokerage expects a strong 72% earnings CAGR over FY20–22, led by a 23% sales CAGR in Other Regulated and a 52% sales CAGR in Emerging Markets, supported by 140bp margin expansion.
It has increased earnings estimate by 19.6%/14.2% for FY21/FY22 to factor superior execution across the markets and better operating leverage. It has rolled the price target to Rs 650 on a 12M forward SOTP basis (8x EV/EBITDA for the US / Other Regulated markets, 6x for Emerging Markets, and 5x for Institutional). Given the strong earnings trajectory and attractive valuation, it maintains BUY on the stock.

Promoter/FII Holdings
Promoters held 29.7 per cent stake in the company as of June 30, 2020, while FIIs held 26.8 per cent, DIIs 19.4 per cent and public and others 24.1 per cent.
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