Strides Pharma Science (STAR) Q2 24/25 earnings summary

Executive summary

• Q2FY25 revenue reached ₹12,011 million, up 17% YoY, with US operations at a record $75 million and growth across all markets.

• Profit after tax for Q2FY25 was ₹937-1,103 million, marking a turnaround from a loss in Q2FY24 and reflecting strong operational efficiency.

• The group completed the amalgamation of Strides Alathur Private Limited and advanced the demerger of the CDMO and Softgel business, with regulatory and shareholder approvals in place.

• OneSource reported its third consecutive EBITDA-positive quarter and secured $95 million in fundraising at an 82% premium to prior valuation.

• Commercialized product count in the US increased to 71, with new launches contributing to growth.

Financial highlights

• Q2FY25 EBITDA was ₹2,358 million, up 31% YoY, with EBITDA margin at 19.6-19.8% and gross margin at 58.5-59.9%.

• H1FY25 revenue was ₹22,886 million, up 16.9% YoY; adjusted PAT for H1FY25 was ₹1,942 million.

• Net debt reduced by ₹1,325 million in H1FY25 to ₹19,025 million; net debt to EBITDA at 2.1-2.18.

• ROCE improved to 17.18-17.2% in H1FY25.

• Cash flow from operations in H1FY25 was ₹4,182 million, supporting CapEx and debt reduction.

Outlook and guidance

• FY25 revenue expected to grow 12–15% YoY, with H1FY25 growth at 17% ahead of target.

• EBITDA margin guidance for FY25 is 20–22%, with H1FY25 trending at 19.8%.

• Net debt to EBITDA targeted below 2.0x by Mar'25.

• OneSource FY25 guidance: revenue $160–$180 million, EBITDA margin 34%, with GLP-1 commercialization expected in Q4FY25.

• Demerger of CDMO and Softgel business expected to unlock value and enhance focus on core operations.