Strides Pharma Science (STAR) Q4 24/25 earnings summary

Executive summary

• Achieved strong operational and financial performance in FY25, surpassing guidance and with board-approved audited results for the year ended March 31, 2025.

• Focused on OPEX leverage, EBITDA growth, and gross margin expansion, with consistent quarter-on-quarter EBITDA growth for over 12 quarters.

• US business outperformed, with significant product launches, approvals, and a strategic focus on high-value, low-competition products.

• Major demerger of CDMO and Soft Gelatin business effective April 1, 2024, with results restated to reflect discontinued operations.

• Maintained high service levels and market share, with a robust pipeline for future growth in the US and other regulated markets.

Financial highlights

• FY25 consolidated revenue from continuing operations was Rs. 45,653 million, up from Rs. 38,901 million year-over-year; US revenue reached $291 million, up 22%.

• EBITDA for the year was INR 803 crore, up 37% year-over-year, with a margin of 17.6% (252 bps expansion).

• Profit after tax from continuing operations for FY25 was Rs. 4,094 million, compared to a loss of Rs. 1,439 million in FY24 (restated).

• Basic EPS for continuing operations was Rs. 44.05 for FY25, compared to Rs. (13.21) in FY24.

• Board approved a dividend of INR 4 per share, subject to shareholder approval.

Outlook and guidance

• Targeting continued OPEX leverage and EBITDA growth, with a focus on maintaining high gross margins and measured revenue expansion.

• US business aims for $400 million revenue in the next two years, with a strong pipeline of ANDA launches and controlled substance nasal spray opportunities.

• R&D spend to nearly double, with $15 million of $20 million allocated to the 'beyond $400 million' portfolio, focusing on 505(b)(2) filings.

• CapEx expected to remain at or below current levels, with future investments skewed toward R&D.

• Sustained high-teens to 20% EBITDA margins targeted over the next three years.