Here's why Strides Pharma shares fell 7% today

The idea the company has said is to make the platform a speciality focused pharma CDMO business. Under the proposed restructuring, Stelis which is the biopharma arm of the CDMO business will house these CDMO businesses, which will comprise of biologicals, complex injectables, oral technologies such as drug delivery systems.

All the CDMO businesses, which are proposed to bought into the new venture are profitable, which will add $100 million of incremental CDMO revenue to strides. The Board has given in principle agreement and due diligence will need to take place, scheme details likely in the next 12 weeks.

On the fundamentals the company expects margins to probably hit 20 percent, expect debt to reduce by around Rs 700 crore more than the targeted Rs 500 crore earlier and they expect US revenues to recover to the $60 million quarterly runrate.

Strides Pharma said that the company is on track to achieve the targets it set out at the start of financial year 2024. Founder, Managing Director and Executive Chairperson Arun Kumar said that the company will sustain the momentum in performance driven by the continuous improvement in the quality of business and deliver strong cash generation going forward.

While the guidance was positive, the Street will seek out more details on the company’s restructuring plans in the next few weeks.