This pharma stock has zoomed over 380% in Samvat 2080; trades at 8-yr high

Wockhardt shares surged 5% to Rs 1,212.55, its highest level since February 2016 and has zoomed 157% thus far in the calendar year 2024.

Shares of Wockhardt hit an over 8-year high at Rs 1,212.55, gaining 5 per cent on the BSE in Thursday’s intra-day trade in an otherwise weak market amid heavy volumes on expectations of earnings improvement. The stock of the global pharmaceutical and biotechnology major was trading at its highest level since February 2016. It had hit a record high of Rs 1,996.06 on March 12, 2013.

 

At 11:33 am; the stock was quoting 3 per cent higher at Rs 1,189, as compared to 0.5 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped nearly 3-fold, with a combined 906,000 shares changing hands on the NSE and BSE.

 

 

Thus far in Samvat 2080, the market price of Wockhardt has appreciated nearly 5-times or 384 per cent from a level of Rs 250.50 on November 10, 2023. The stock was among the top 4 gainers from the BSE Allcap index during the Samvat 2080.

 

In the past three weeks, Wockhardt has rallied 28 per cent. Thus far in the calendar year 2024, it has zoomed 157 per cent, as compared to 10 per cent rise in the BSE Sensex. The stock jumped 135 per cent when compared with its qualified institutional placement (QIP) price of Rs 517 per share.

 

The company on October 16 said it believes that the sudden increase in volume at the counter may be on account of recent press release submitted on October 11, 2024 relating to company’s product i.e. novel antibiotic MiqnafTM (Nafithromycin) which received favourable recommendation from Subject Expert Committee (SEC) of Central Drugs Standard Control Organization (CDSCO) for the treatment for Community-Acquired Bacterial Pneumonia (CABP).

 

The SEC recommendation was based on CDSCO's comprehensive review of the product dossier consisting of non-clinical, US/EU Phase 1, Global Phase 2 and India Phase 3 clinical studies conducted over the last 15 years, it added.

 

A positive opinion from the SEC of CDSCO would pave the way for gaining DCGI's final approval for Miqnaf, the company stated. Miqnaf is the once-a-day 3-days-only treatment for CABP patients, including those caused by multi-drug resistant (MDR) bugs. CABP is the most common infection, leading to hospitalisation and death. Globally, 2.4 million annual deaths are caused by lower respiratory tract infections.

 

In a separate filing on October 16, Wockhardt had announced the filing of its fast-acting insulin analog, Aspart injection (ASPARAPIDTM), with the Drugs Controller General of India (DCGI). After its approval, the Aspart insulin will be available in cartridges, vials, and prefilled disposable pens. As per Wockhardt, the market size of Aspart in India is currently pegged at over Rs 260 crore, with only two players offering similar products in the domestic market. Further, the company expected the market to grow significantly in the coming years.

 

Wockhardt is a research-based global pharmaceutical and biotech company headquartered in Mumbai, India. It has a presence in the US, the UK, Ireland, Switzerland, France, Mexico, Russia and many other countries.

 

Meanwhile, in first quarter of the financial year 2024-25 (Q1FY25), Wockhardt had reported 216 per cent year-on-year (YoY) growth in earnings before interest, taxes, depreciation, and amortisation (EBITDA) at Rs 100 crore compared to Rs 32 crore in the previous year quarter. Reported EBITDA margins improved to 13.4 per cent from 4.8 per cent in a year ago quarter. Revenue grew 14 per cent YoY to Rs 747 crore from Rs 658 crore in Q1FY24.

 

In March 2024, the company had raised Rs 480 crore by issuing 9.29 million equity shares to qualified institutional buyers (QIBs) at price of Rs 517 per share.

 

On August 30, CARE Ratings revised ratings outlook of Wockhardt bank facilities on account of an improvement in liquidity position of the company due to successful completion of QIP to the tune of Rs 463 crore (net of expenses), decline in pledge of shares from 69 per cent for the quarter ended June 2023 to 37 per cent for the quarter ended June 2024 and improved overall performance during Q1FY25.

 

On a consolidated basis, the company has significant revenue contribution from export market. Around 78 per cent of its overall revenues in FY24 earned in foreign currency mainly denominated in USD (US Dollar) GBP and Euro. Majority of the raw material requirement is sourced through local vendors across all regions resulting in lower dependency on imports. Although, the company is exposed to foreign currency fluctuation risk. There is a partial natural hedge available owing to manufacturing undertaken outside India, foreign currency term debts and sales outside India, the rating agency had said in its rationale.