This Mukul Agrawal portfolio stock slipped 15% after 164% rally in 5 months

The management said the inherent uneven nature of the company's business means that annual progression is a better indicator of the company's prospects than quarterly performance

Shares of Neuland Laboratories slipped 15 per cent to Rs 13,526 on the BSE in Wednesday’s intra-day trade after reporting 53 per cent drop in its earnings before interest, tax, depreciation and amortisation (Ebitda) at Rs 65.7 crore for the second quarter of financial year 2024-25 (Q2FY25). Ebitda margin contracted 1,260 basis points (bps) year-on-year (YoY) and 810 bps quarter-on-quarter (QoQ) at 20.8 per cent.

 

In past five months, the stock price of Neuland Labs has zoomed 164 per cent from level of Rs 5,999 on June 4. It had hit a record high of Rs 16,501 on October 16, 2024. At 02:13 pm; the stock was trading 13 per cent lower at Rs 13,752, as compared to 1.2 per cent rise in the BSE Sensex.

 

Investor Mukul Mahavir Agrawal held 4,00,000 shares, representing 3.12 per cent stake, in Neuland Labs at the end of September quarter, shareholding pattern data shows.

 

In Q2FY25, the company’s profit after tax declined 64.1 per cent Y-o-Y at Rs 32 crore. Total income was down 25 per cent Y-o-Y at Rs 315.20 crore. The financials of the quarter under review are subpar relative to how the business has been performing over the last few quarters.

 

The management said that the inherent uneven nature of the company’s business means that annual progression is a better indicator of the company’s prospects than quarterly performance. “We continue to make progress on our strategic plans and are enthusiastic about sustainable long-term growth driven by customer acquisitions, deepening capabilities, agile capacity expansion and optimization of processes,” the management said.

 

The revenues this quarter were driven by a few key molecules on the commercial CMS and Generic Drug Substances (GDS) specialty side. "Completion of additional manufacturing facilities in this year coupled with anticipated commercial launch of molecules on the CMS side gives us the confidence of achieving high growth in FY26 and beyond," the management said.  They believe that the environment remains favourable for the company in the medium to long term as indicated by customer interest and addition of early-stage projects.   Neuland Labs is a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and custom manufacturing solutions (CMS) services to customers.