Small Cap Pharma Stock Rallies 10.44%, Board Recommends Final Dividend, Buy, Says Sharekhan

Sharekhan in its recent report on Strides Pharma Science Ltd. has come with a Buy rating for a target price of Rs. 450/share. According to the assigned target price on the stock, if the stock is purchased at the current market price, it is likely to give a decent gain of up to 13%.

It is a small cap pharmaceuticals sector company. It has a market capitalisation of Rs. 3,600.82 crore.

Dividend

On May 25, 2023, the Board of Directors of Strides Pharma Science Ltd. held a meeting and recommends a Final Dividend of Rs. 1.50/share of Rs. 10 each at the rate of 15% for the financial year 2022-23.

According to the regulatory filing by the Board of Directors of the company, "Recommendation of final dividend of Rs. 1.50/- per equity share of Rs. 10/- each (at the rate of 15%) for financial year ended March 31, 2023. Dividend will be paid within 30 days from the date of Shareholders' approval at the ensuing Annual General Meeting (AGM) of the Company".

Valuation: Retain Buy with an unchanged PT of Rs. 450

According to Sharekhan, Strides Pharma has witnessed strong earnings growth driven by strong growth witnessed by the regulated markets such as the US and other regulated markets (ORMs) such as Australia, Canada, and Europe. The company expects to sustain the momentum in regulated markets driven by new products in the front ends and forming new partnerships in the B2B business.

The company plans to launch from its pool of approved ANDAs. The company also plans to increase the branded portfolio of products in South Africa and focus on productivity enhancements of its field force to drive growth and margins in the segment. It also intends to concentrate on maximizing the US and UK approved portfolio, accelerating market penetration in Africa and new regions. The stock trades at reasonable valuations of ~17.4x/10.0x its FY2024E/FY2025E earnings vs peers trading at ~20.0x/16.0x its FY24E/FY25E EPS.

"We retain our Buy recommendation on the stock with an unchanged PT of Rs. 450. Overall, banks reported strong earnings growth in Q4FY2023 and ended FY23 on strong note with record RoA/RoE driven by strong PPoP growth and lower credit cost along with improvement in asset-quality matrix," the brokerage has said.

Stock Outlook

On Wednesday, the share price of Strides Pharma Science Ltd. closed 10.44% higher at Rs 398.75/share. The stock surged 10.98% in 1 week.

It jumps 10.49% in 1 month and 35.49% in 3 months, respectively. It gave 24.2% positive return in the past 1 year. While, it declined 4.27% in 3 years, and surged 14.81% in 5 years.

The stock recorded the 52-week high at Rs. 408/50/share on 7 June 2023. While the 52 week low on 21 March 2023 at Rs. 268.15/share.

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.