Strides Shasun, a Rs.2,800 crore plus pharma major, has suffered major setback during the fourth quarter and year ended March 2018 on account of intense pricing pressure and loss of market share in US, lower institutional sales, lower sales in Africa and investment of Rs.44 crore in CHC. Due to poor performance, Strides scrip declined sharply by Rs.115.85 today or over 23 per cent to Rs.387.10 on BSE. The board of directors has declared equity dividend of 20 per cent for the year 2017-18.

The company incurred net loss of Rs.4.40 crore during the fourth quarter ended March 2018 as against a net profit of Rs.91.59 crore in the similar period of last year. Its net sales declined by 1.9 per cent to Rs.664 crore from Rs.677 crore. Its other income declined to Rs.21.80 crore from Rs.62.39 crore. EBDITA declined to Rs.168 crore from Rs.192 crore.

Arun Kumar, Group CEO and managing director, said, “The financial year 2017-18 was a difficult year for Strides. While we continue to build momentum with our strategy, our execution was far from satisfactory. We completed several of our corporate actions including existing non-core operations and markets that did not add value to our overall goal of being a diversified B2C player globally.”

“We are particularly happy with the strategic progression at Arrow in Australia to become a leading and a profitable player. We are geared for a combination with Apotex to create an industry-leading position in Australia both by value and volume. We expect the transaction to achieve closure in the next two-quarters subject to regulatory approvals.”

“In 2018-19 our clear focus will be on the improving the quality of growth which will deliver a strong bounce back in the second half of FY19,” he added.

For the full year ended March 2018 its consolidated net profit declined sharply by 74.9 per cent to Rs.70.22 crore from Rs.279.71 crore in the previous year. Its net sales improved only by 3 per cent to Rs.2,839 crore from Rs.2,755 crore. The company completed demerger of API business to focus on B2C business. It generated Rs.500 crore by divesting Indian branded generics business and paid debt of Rs.400 crore during 2017-18. It acquired controlling stake in Trinity to foray into high entry barrier market of South Africa.

Its US sales declined to Rs.774 crore during 2017-18. Its own frontend products continue to track healthy market share viz., Ranitidine 35%, Dutasteride 33%, Ergocalciferol 38%, Methoxsalen 40%, Benzonatate 16% and PEG Rx 25%. The weak performance in partnership portfolio and delay in approval for oseltamivir in one of the worst flu seasons additionally impacted performance.

Australia sales amounted to Rs.920 crore. Australia business improved due to addition to pharmacy footprint which reached at over 1,400. It launched 29 new products. Strides and Apotex taking steps to merged their Australian business. The combination will enable Strides, through the merged business, to become the number 1 Australian generic pharmaceutical company by both volume and revenue. The sales in other regulated markets reached at Rs.338 crore with continued traction in UK frontend.

Its Institutional business registered sales of Rs.561 crore during 2017-18 due to difficult year for ARV business, margin compression for supplies under long-term contracts, price erosion. Sequential decline in anti-malaria business. Its anti-malaria revenue declined to US$ 15.6 million from $35.7 million in the previous year.