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Strides shares up 12% after fall in past two sessions

The issues in the institutional and US business led to the stock taking massive beating after the Q4 result announcement.

After relentless fall over past few sessions, Strides Shasun has surged 12% intraday today. The stock took a massive beating after company reported loss in its Q4 result. The US business of company halved from $42mn in Q3 to $21mn in Q4 due to the pricing issues in gLovaza and Urocit-K. Due to the hostile pricing by the competitors, the company had to stop the shipments of the products.

Additionally, in its institutional business, company suffered sales decline due to the decline in funding in the ARV business. The rise in the API prices also led to decline in the margins of the institutional business.

The company was expecting the approval for gTamiflu, however, the API of the product received some USFDA queries. Strides, in the call to analysts, said that the product was likely to get an approval and subsequent launch in Q4, however, due to the queries on API, the drug will not get approval in Q2FY19E. This would also put pressure on the US revenues.

The stock after taking massive beating is seeing some ease in pressure. We have a target price of Rs444.  Read Q4 result analysis and conference call notes, read IIFL view on Strides Shasun. Also read critical review of its business on our website.