In Friday’s trading session, the shares of one of the pharma stocks specialising in development, manufacturing, and commercialization of a wide range of Active Pharmaceutical Ingredients (APIs) and intermediates jumped by 8 percent after Ace investor Sunil Singhania buys stake in it worth ~Rs. 62 crores
Price action
With a market capitalization of 5,725.3 Crores on Friday, the shares of Aarti Pharmalabs Limited rose by 7.6 percent making a high of Rs 714.25 compared to its previous closing price of Rs 631.75.
What Happened
Aarti Pharmalabs Limited specializes in the development, manufacturing, and commercialization of a wide range of Active Pharmaceutical Ingredients (APIs) and intermediates.
Ace investor Sunil Singhania’s Abakkus Asset Management has purchased a significant stake in the company via a block deal. On December 26, Abakkus Asset Management acquired 10,69,972 shares of Aarti Pharmalabs, representing a 1.18 percent stake in the company. The shares were acquired at an average price of Rs. 575.04 per share, bringing the total deal value to Rs. 61.52 crore.
The company’s promoter group entities, Orchid Family Trust and Tulip Family Trust, were the sellers. Orchid Family Trust offloaded 4,97,750 shares, representing 0.54 percent of the company, while Tulip Family Trust sold 5,02,250 shares, or 0.55 percent, at Rs. 575 per share.
About the company
Aarti Pharmalabs Ltd. is a leading Indian pharmaceutical company that offers a comprehensive portfolio of products catering to various therapeutic segments, including cardiovascular, anti-diabetic, anti-inflammatory, and central nervous system disorders.
The company is known for its expertise in providing high-quality, cost-effective solutions to the global pharmaceutical industry. It also focuses on contract research and manufacturing services (CRAMS), collaborating with multinational pharmaceutical companies.
Future outlook
Aarti Pharmalabs Ltd plans to strengthen its API and CDMO (Contract Development and Manufacturing Organization) segments by introducing more value-added products and acquiring new customers. The company expects an EBITDA growth of approximately 10-12 percent in FY25 and aims to achieve a long-term annual growth rate of about 15 percent over the next three years.
Financials
The company’s revenue rose by 5 percent from Rs 440.78 crore to Rs 462.51 crore in Q2FY24-25. Meanwhile, Net profit inclined from Rs 51.8 crores to Rs 54.62 crore during the same period.
Key Financial ratios
Aarti Pharmalabs Limited has an Return on Equity (RoE) of 12.28 percent and a Return on Capital Employed (RoCE) of 14.91 percent. Furthermore, the company’s debt-to-equity ratio is 0.21.
Written by Sridhar J
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