Strides Arcolab, a Bangalore based Rs.1,125 crore plus pharma entity, has posted consolidated net profit at Rs.18.98 crore during the second quarter ended September 2015 as against a net loss of Rs.42.56 crore in the similar quarter of last year. It incurred a net loss in the previous period mainly due to tax on dividend from subsidiary of Rs.84.81 crore. The profit before tax and adjustments improved by 15 per cent to Rs.45.75 crore from Rs.39.79 crore. The EBIDTA moved up by 26.4 per cent to Rs.85.79 crore from Rs.67.85 crore. Despite improved profit, Strides scrip declined by Rs.29.60 on BSE and closed at Rs.1287.75.
The consolidated net sales improved by 32.3 per cent to Rs.350.88 crore from Rs.265.23 crore in the corresponding period of last year. Its sales in regulated markets went up by 47 per cent to Rs.144 crore from Rs.98 crore. Its institutional business improved by 47 per cent to Rs.119 crore from Rs.81 crore. However, its sales in emerging market remained under pressure and declined by 3 per cent to Rs.111 crore from Rs.113 crore due to delays in generic sales in a few countries and volatile exchange rate.
Its R&D expenditure went up to Rs.11.20 crore from Rs.5.7 crore. Its cumulative ANDA filings reached at 34 ANDAs and 16 ANDAs are pending for approval from US FDA. It received one ANDA approval during the quarter under review. Further, cumulative PEPFAR filings reached at 18 and received 17 tentative approvals so far. Its R&D spending in biotech increased to Rs.4.90 crore from Rs.2.30 crore. It obtained regulatory consent for conducting phase I clinical trial in Australia for its first biosimilar molecule. It initiated developmental activities for third biosimilar programme based on a patented technology. The company is setting up a bio-pharmaceutical facility at Doddaballapur, Bangalore and likely to commission shortly.
Its employees cost went up by 41.2 per cent to Rs.55.04 crore from Rs.38.97 crore and interest cost by 44.2 per cent to Rs.18.92 crore from Rs.13.11 crore.
Arun Kumar, founder and Group CEO, said, “It has been a strong comeback quarter for the company after a subdued first quarter with growth across businesses. Our performance during the quarter was further bolstered by a quick closure and integration of the acquired Arrow pharmaceuticals business in Australia.”
The acquisition of CNS divisions of Ranbaxy from Sun Pharma, brands portfolio from Johnson & Johnson in India and a majority stake in domestic branded business of Medispan. Medispan has created strong portfolio of niche brands. The acquisition provide the company access to several brands. It also received approval for merger of Shasun Pharmaceuticals from High Court of Bombay and awaiting approval from FIPB. It completed the acquisition of Arrow Pharmaceutical on August 31, 2015.
The company is now planning to raise long term funds upto Rs.1,500 crore by way of issue of GDRs/ ADRs/FCCBs/QIP or such other equity linked instrument including the green shoe option after certain approvals.
The company is spinning off its biotech business into a separate listed entity and intends to retain up to 20 per cent treasury ownership in the demerged entity after necessary regulatory approvals.
For the first half ended September 2015, Strides' consolidated net sales increased by 19.8 per cent to Rs.607 crore from Rs.506 crore in the same period of last year. Its net profit reached at Rs.60.84 crore as against a net loss of Rs.23.57 crore. EPS worked out to Rs.10.20 as against negative Rs.3.96 in the last period. With the acquisition of Arrow and expected FIPB approval for Shasun merger, the company expects its revenue in the range of Rs.1,850 crore to Rs.2,000 crore for second half of FY16 with expected EBDITA of Rs.350 crore to Rs.380 crore. The guidance does not include recently announced acquisitions of CNS divisions from Sun Pharma, brands portfolio from Johnson and majority stake in domestic branded business from Medispan.