Strides Pharma Science (STAR) Q1 26/27 earnings summary

Executive summary

• Revenue grew 13% year-over-year to ₹12,654 million, driven by strong 17% growth in ex-U.S. markets, while U.S. revenue remained stable at $68 million.

• EBITDA increased 5.4% year-over-year to ₹2,298 million, despite higher freight and operating costs due to geopolitical disruptions.

• Operational PAT rose 8% year-over-year to ₹1,231 million; reported PAT surged 57% to ₹1,655 million, including a gain from the sale of a majority stake in Pivot Path.

• Net debt reduced by ₹119 million during the quarter, with Net Debt/EBITDA at 1.52x.

• Sustainability score improved to 68/100, up 19 points year-on-year.

Financial highlights

• Gross margin increased 14% year-over-year to ₹7,702 million, with gross margin percentage rising 60bps to 60.9%.

• EBITDA margin at 18.2%, slightly ahead of Q4 FY 2026 but down 130bps year-over-year.

• Reported EPS rose 57.6% year-over-year to 17.0.

• Operating cash flow for the quarter was ₹1,087 million.

• Total comprehensive income for the period was ₹1,944.10 million, up from ₹1,442.82 million year-over-year.

Outlook and guidance

• Ex-U.S. business expected to outpace company average growth, with supply chain delays seen as temporary.

• U.S. growth trajectory anticipated to improve in H2 FY 2027, driven by new product approvals and launches.

• Long-term aspiration remains $375 million in North American revenue by FY 2028.

• Gross margin guidance maintained at 58%-60%, with a focus on sustaining superior EBITDA margins.

• A final dividend of ₹5 per equity share, totaling approximately ₹461 million, has been proposed, subject to shareholder approval.