Stride declared Q1 results.
Press Release
The investor conference call summary –
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They care consolidating the CDMO business under Stelis; They have appointed big 4 for valuation along with a global banker to recommend the scheme of control under Stride for this division.
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Very interesting part is – Combined CDMO business to have revenue of $100-150 Mn in first year. Revenue Visibility of $400 Mn for 2027. Company won contract of $25 Mn in CDMO space during Q1 which is more in terms of value than last 3 years CDMO order book. CDMO is catching the momentum and management want to focus on that opportunity. The EBITA for CDMO expected to be 28-30%. They aim to have CDMO platform which is differentiated and not the commodity in nature. The capex requirement for achieving $400/yr revenue in 2027 is about $30.
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Post the Syngene transaction for Unit-3, Debt on Stelis which was 1,400 Cr (last year), 740 Cr(currently) will come below 300 Cr. releasing lot of guarantees signed by Stride. This is a huge de-risking step for stelis.
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Other key updates –
- FY24, US business guidance – $240 – 250 Mn revenue
- Stride will strive for 57-60% gross margin which has been their band for gross margins.
-Current year focus is to improve EBITA and improve free cash flow.
Given the current revenue is about 3,500 Cr, one thing is for sure Stride is going to double the revenue in next 3 yrs. with stable margins.
Disc- Invested.
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