Suven Pharma gains 5% to hit record high; The stock is up 18% in three days

Shares of Suven Pharmaceuticals hit a record high of 617 rupees after rising 5 per cent on the Bahrain Pharmaceutical Exchange in Thursday’s trading in the otherwise weak market. By comparison, at 10:41 a.m., the S&P BSE Sensex was down 0.13 percent at 57,608 points. The company’s shares are up 18 percent in the past three days on expectations of solid earnings.

In the past three months, Suven Pharma has outperformed the market with a 30 percent rise, versus less than a rise in the benchmark Sensex.

The company focuses on the Contract Development and Manufacturing Operations (CDMO) business. Suven provides services to the world’s leading life sciences and fine chemical specialties including custom synthesis, process research and development, scaling and contract manufacturing of media, APIs and formulations.

For the October-December quarter (Q3FY22), Suven Pharma posted a 40 per cent YoY growth in independent earnings after tax (PAT) of Rs.136.95 crore, on the back of strong operating performance.

Revenue grew 43 per cent year-on-year at Rs 401 crore, while EBITDA (earnings before interest, tax, depreciation and amortization) jumped 37 per cent year-on-year at Rs 195 crore. However, Ebitda’s margins contracted by 159 basis points to 46.1 percent, while improving by 162 basis points sequentially.

The Company’s Board of Directors, at its meeting on February 8, 2022, gave its approval in principle to assess the opportunity to acquire Caper Pharma Pvt. Ltd, a unit of special economic zones in Hyderabad engaged in installations. The company said it would evaluate the proposal with financial, tax and legal diligence to finalize the final agreements.

β€œThe focus on research by global innovators has fueled a post-Covid intensification and bodes well for CRAMS Pharmaceutical operations, which remain a key growth driver. The company announced an investment of Rs 600 crore – in upgrading facilities, absorbing new technology and transferring its own R&D – to be met. for implementation over two to three years, and its benefits may be visible in the longer term,” Result Update.

In the formulations business, 17 ANDAs were submitted, however, the proposed acquisition of Casper pharma’s OSD facility and subsequent operational performance in ramping up the sector amid various challenges will be a major issue to watch, the brokerage said.

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