Strides Pharma Q2 Results: Stock jumps 13% on strong margin expansion; US guidance maintained

Shares of Strides Pharma Ltd. surged to the day's high on Friday, October 31, in response to its September quarter results, that were better on a year-on-year basis. The stock surged as much as 13%, closing in on its 52-week highs of ₹972.

Net profit for the company went up by 82% from last year to ₹131.5 crore from ₹72.2 crore.

Revenue increased by 4.6% on a year-on-year basis to ₹1,221 crore. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 25.4% from the year-ago period to ₹232 crore.

EBITDA margin for the quarter expanded by over 300 basis points to 19% from 15.8% last year.

Strides Pharma's gross margin expanded by 500 basis points from last year to 57.8% from 52.8% last year.

The company also reduced its net debt by ₹47 crore on a sequential basis despite currency headwinds and ongoing capex investments.

For the US market, Strides Pharma reported sales of $73 million, nearly the same as the same quarter last year. The management has reiterated that the US business will achieve revenue of nearly $400 million by financial year 2027-2028.

The company's deal momentum continued in Europe with large pan-EU partners being onboarded by the company. For the UK business, the management expects that to see growth in the second half led by planned product launches.

Expansion of product portfolio and new customer acquisitions to drive growth, conversion of the existing strong funnel of new opportunities to deliver growth, and continued momentum in filings will drive growth in the medium term are the three important points highlighted by Strides Pharma for the European business.

Shares of Strides Pharma are trading 11.6% higher after the earnings announcement at ₹950. The stock is up 35% so far on a year-to-date basis.