This pharma stock has fallen from Rs 947 to Rs 455, should you buy?
Strides Pharma stock has halved from its 52-week high
|Current market price||52 week high||fall|
|Rs 455||Rs 947||52.00%|
Strides Pharma stock has fallen from a 52-week high of Rs.947 to the current level of Rs.455. One of the reasons behind the sharp decline is the losses the company reported for the second quarter ended September 30, 2021.
The company suffered a price drop on one of its basic products in US markets, affecting Strides’ profitability. We do not expect a trend reversal, at least in the next few quarters.
Dismal performance for the second quarter ending September 30, 2021
For the quarter ended September 30, 2021, the company has reported a net loss of Rs 168 crores. In an interview with The Economic Times, R. Ananthanarayanan, Managing Director & CEO said that the silver lining is that they haven’t seen a price challenge throughout the month of October, leading them to believe the price environment is stabilizing at a much lower level .
The problem for Strides Pharma right now is that the problem is more structural in nature, and that’s not good news. One-off things like a US FDA warning can still be resolved, but entrenched pricing issues may well take time.
Should You Buy Strides Pharma Science Stock?
The other problem for the company is that it has huge debts to service. According to data available from Simply Wall Street, the debt to equity ratio is 88.3%, which is certainly quite high.
At Strides Pharma’s current market price, it’s difficult to advise investors to buy the stock. The decisive factor here remains the company’s performance on the US markets, for which one must await the figures for the December quarter or at least a positive management comment.
It’s difficult to tell investors to buy Strides Pharma Science stock, and we’d advise a wait-and-see approach until clarity emerges over the next few quarters.
Greynium Information Technologies and the author shall not be liable for any loss arising from decisions made based on the article. Investing in stocks is risky. The author and his family now own all of the above stocks.