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

Executive summary

• FY25 marked a strong turnaround with all internal and external targets met, driven by operational leverage and consistent EBITDA growth over the last 12 quarters.

• Profitability, efficiency, and growth were the main pillars, with all key metrics surpassing guidance, including revenue, EBITDA, and US business performance.

• Board approved audited standalone and consolidated results for the quarter and year ended March 31, 2025, with unmodified audit opinions for both.

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

• The company maintained high service levels and market share, especially in the US, and continued to expand its product portfolio and regulatory filings.

Financial highlights

• Revenue grew 13.2% year-over-year, with US business revenue up 22% to $291 million, exceeding guidance.

• Consolidated revenue from continuing operations for FY25 was Rs. 45,653 million, up from Rs. 38,901 million year-over-year.

• EBITDA for FY25 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.

• Q4 EBITDA was INR 218 crore, up 22% year-over-year, with an 18.3% margin.

• Free cash flow for the year was INR 230 crore after INR 242 crore CapEx.

• Dividend of INR 4 per share approved.

• Gain on disposal of assets from discontinued operations was Rs. 31,881 million in FY25.

Outlook and guidance

• Continued focus on OPEX leverage, EBITDA, and gross margin growth.

• US business targets $400 million revenue in the next phase, with ongoing launches from a pipeline of 150+ ANDAs.

• R&D spend to nearly double, with $15 million of $20 million allocated to the 'beyond $400 million' portfolio, mainly 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.

• Board recommended a final dividend of Rs. 4 per share, resulting in an estimated cash outflow of Rs. 369 million, pending AGM approval.