What's driven this Mukul Agrawal portfolio stock up 223% in 1 year; Details

Shares of Strides Pharma Science hit a new high of Rs 1,651.15, as they rallied 5 per cent on the BSE in Wednesday's intra-day trade in an otherwise a weak market

Shares of Strides Pharma Science hit a new high of Rs 1,651.15, as they rallied 5 per cent on the BSE in Wednesday’s intraday trade in an otherwise weak market. In comparison, the BSE Sensex was down 0.5 per cent at 81,447, at 11:41 AM.

In the past three months, the company's stock has surged 75 per cent, and zoomed 224 per cent in the past one year, as compared to the 23 per cent rise in the benchmark index BSE Sensex.

Investor Mukul Mahavir Agrawal holds 1.5 million shares in Strides Pharma, representing a 1.63 per cent stake in the company at the end of the June quarter, shareholding pattern data on the BSE showed.

The company has not yet disclosed the shareholding pattern for the quarter ended September 2024.

 

Strides Pharma Science, a global pharmaceutical company, mainly operates in the regulated markets and has an “in Africa for Africa” strategy and an institutional business to service donor-funded markets. The company’s global manufacturing sites are located in India (Chennai, Puducherry and two locations in Bengaluru), apart from Italy (Milan), Kenya (Nairobi), and the United States (New York).

Strides today announced that its associate company, OneSource Specialty Pharma (formerly known as Stelis Biopharma), the group’s specialty pharma contract development and manufacturing organisation (CDMO), has received confirmed commitments for fundraising of Rs 801 crore (approximately $95 million) from marquee domestic and foreign institutional investors and family offices, in a pre-listing round.

Strides, in an exchange filing, said "The share subscription agreements are being executed at a pre-money equity value of $1.65 billion, delivering to Strides’ shareholders an embedded value of Rs 663 per share of Strides’ holding in OneSource representing an approximately 82 per cent premium over the previous embedded value of Rs 364 per share as per the Scheme of Arrangement announced earlier in September’23." 

The strong interest from leading investors reflects growing confidence in our capabilities and the immense potential of the CDMO sector emerging out of India, the company added.

On September 25, 2023, Strides had announced the creation of OneSource, a specialty pharma pure-play CDMO player, by integrating Stelis’ Biologics CDMO, SteriScience's Complex Injectables, and its own soft gelatine businesses into a single entity by way of a Scheme of Arrangement.

As part of the Scheme, Strides' shareholders are to receive one share of OneSource for every two shares of Strides they hold in a share swap ratio of 1:2.

Driven by effective debt reduction, cost optimisation, and growth in the US business owing to a strong pipeline and redefining CDMO business, analysts expect healthy traction for the company in the coming quarters.

In FY25, Strides targets to grow its continuing business at 12-15 per cent with a significant growth coming in H2FY25 based on targeted product launches globally. The company is confident of increasing its earnings before interest, taxes, depreciation, and amortisation (Ebitda) from its current levels and intends to achieve Net Debt/ EBITDA ratio of less than 2x by end of FY25. The company is also committed to grow its US business and achieve revenues of $400 million in the next three years.

Stelis Biopharma is in the process of transitioning into the high-growth CDMO business 'Onesource', with positive Ebitda and profit after tax (PAT). The company is currently awaiting regulatory approvals and subsequently plans to list on stock the exchanges in the second half of FY25.

The company is expanding its fill-finish capacity to cater to the GLP-1 drugs. The management expects to reduce its net debt of Rs 500 crore and plans to lay a capex of around Rs 150-200 crore through internal accruals in FY25, analysts at Geojit Financial Services had said in the company's Q1FY25 results update.

Furthermore, the company is expected to deliver a strong performance on the back of new product launches in the US, strengthening balance sheet and cost optimisation measures, but the brokerage firm believes the recent sharp rally in prices has limited any further upside potential in the near future.