At a Glance
Strides Pharma Science just dropped its Q1 FY26 results and oh boy, they’re flexing! Revenue stood at ₹1,119.7 crore, EBITDA at ₹218.1 crore (19.5% margin), and PAT at ₹114 crore – up a sizzling 456% YoY. The stock is at ₹957 with a P/E of 143 (because why not price it like a tech unicorn?). Promoter stake is a thin 28.3% with half pledged, making this a thriller stock where drama is guaranteed.
Introduction
From soft-gel capsule king to global generic player, Strides has come a long way. The company loves acquiring, restructuring, and spinning off businesses like a magician with a deck of cards. While revenue growth has been modest, profits have skyrocketed (mostly due to cost control and product mix). But with high working capital days (248) and low promoter holding, the stock screams: “High risk, high adrenaline!”
Business Model (WTF Do They Even Do?)
- Core Business: Generic formulations across tablets, capsules, and niche dosage forms.
- Geography: US, EU, Australia, and over 100 countries.
- Specialty: Soft gelatin capsules (think vitamins, supplements, and more).
- Strategy: Aggressive inorganic growth – acquisitions galore, followed by market entries.
Essentially, Strides makes affordable meds, sells them everywhere, and occasionally surprises investors with either massive profits or random losses.
Financials Overview
Q1 FY26 Key Numbers:
- Revenue: ₹1,120 Cr (+6.2% YoY)
- EBITDA: ₹218 Cr (EBITDA margin 19.5%)
- PAT: ₹114 Cr (YoY jump from ₹13 Cr to ₹114 Cr – that’s Bollywood-level drama).
Annual Trend:
- FY25 Revenue ₹2,139 Cr
- FY25 PAT ₹2,886 Cr (inflated by one-time other income).
- 3-year Sales CAGR: 3% (meh).
- 3-year PAT CAGR: 154% (wow).
Valuation
The market is valuing Strides like a celebrity startup.
- P/E: EPS TTM ₹6.7 × P/E 25 → Fair Value ₹168
- EV/EBITDA: EBITDA FY25 ₹263 Cr × 10 → EV ₹2,630 Cr → Fair Price ₹500
- DCF: Conservative cash flow growth 10% → Intrinsic Value ₹550
Fair Value Range: ₹500–₹600 (Current ₹957 = investor euphoria overdose)
What’s Cooking – News, Triggers, Drama
- Q1 PAT up 8x YoY – investors cheering.
- ESOP Allotment – employees smiling.
- Debt reduction – cleaner balance sheet.
- High P/E – bubble watch.
- USFDA Approvals: Pipeline remains strong with niche formulations.
Balance Sheet
| Assets | ₹ Cr |
|---|---|
| Total Assets | 5,031 |
| Net Worth | 3,193 |
| Borrowings | 1,202 |
| Liabilities | 636 |
Auditor Comment: Balance sheet is stable, debt manageable, but pledging of promoter stake remains a red flag.
Cash Flow – Sab Number Game Hai
| Year | Ops | Investing | Financing |
|---|---|---|---|
| FY23 | ₹242 Cr | -₹183 Cr | ₹11 Cr |
| FY24 | -₹14 Cr | -₹69 Cr | ₹93 Cr |
| FY25 | ₹421 Cr | -₹138 Cr | -₹370 Cr |
Comment: Operating cash flows have stabilized, but inconsistent past haunts investor confidence.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 85.9% |
| ROCE | 4.66% |
| P/E | 143 |
| PAT Margin | 13% |
| D/E | 0.4 |
Takeaway: ROE looks godly (thanks to low equity and one-offs), but ROCE is sleepy at 4.6%.
P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹1,854 Cr | ₹100 Cr | ₹5 Cr |
| FY24 | ₹2,139 Cr | ₹263 Cr | ₹2,886 Cr* |
| FY25 | ₹2,125 Cr | ₹265 Cr | ₹62 Cr |
(*FY24 PAT boosted by extraordinary other income)
Peer Comparison
| Company | Revenue (₹Cr) | PAT (₹Cr) | P/E |
|---|---|---|---|
| Sun Pharma | 52,578 | 2,389 | 36 |
| Cipla | 27,811 | 1,291 | 24 |
| Strides Pharma | 2,125 | 62 | 143 |
Comment: Strides has micro revenue, macro valuation.
Miscellaneous – Shareholding, Promoters
- Promoters: 28.3% (50% pledged – yikes).
- FIIs: 28% (strong interest).
- DIIs: 13%.
- Public: 30%.
Promoters’ low stake and high pledging keep investors on edge.
EduInvesting Verdict™
Strides Pharma is a rollercoaster stock. The core business is solid, with a strong global presence in generics. Profit surge is impressive, but part of it comes from low base effects and other income. Valuation is stretched with P/E at 143. Promoter pledging adds to risk.
SWOT
- Strengths: Global reach, strong generic pipeline, ROE spike.
- Weaknesses: High P/E, low promoter stake, volatile margins.
- Opportunities: US generic approvals, margin expansion.
- Threats: Regulatory risks, pricing pressure, pledge risk.
Final Word: A turnaround is visible, but the valuation has already priced in perfection. Handle with care.
Written by EduInvesting Team | 29 July 2025SEO Tags: Strides Pharma, Q1 FY26 Results, Generic Pharma Stocks
