Strides’ profit jumps, but other income supplied 33.46% of pre-tax profit
YoY cost growth outpaced revenue and cut operating margin by 1.32 percentage points; the five-day stock reaction was within its usual range.
Filed 31 Jul 2026, 12:38 IST · Strides Pharma Science Ltd (STAR)
Key takeaways
- Consolidated net profit rose +56.73% YoY, but other income accounted for 33.46% of pre-tax profit.
- Operating margin edged up 0.05 percentage points QoQ as expenses fell slightly faster than revenue, but declined 1.32 percentage points YoY as costs grew faster than sales.
- The stock fell -2.54% over five sessions after the results, within its usual post-results move of 3.49% across the past eight quarters.
Price around the results
Profit growth leaned on other income
Strides Pharma Science reported consolidated results, with revenue up +13.01% YoY but operating profit up only +5.37% because expenses grew faster at +14.86%. Other income of Rs 66.80 cr contributed 33.46% of pre-tax profit, while interest expense fell -14.54% YoY. The higher other income and lower interest helped lift net profit by +56.73% despite the weaker operating conversion.
QoQ margin held, but remains below the healthcare peer median
Sequentially, revenue fell -4.39% while expenses declined -4.44%, allowing operating margin to improve by 0.05 percentage points. Margin had risen to 19.75% in Q3FY26 before dropping to 18.11% in Q4FY26 and edging up to 18.16% now. That remains 2.16 percentage points below the 20.32% median for the 114 Healthcare peers that have reported.
Higher tax rate limited the earnings conversion
The tax rate rose 4.41 percentage points QoQ and 3.61 percentage points YoY to 17.09%. Even so, net profit increased +28.01% QoQ, mainly reflecting the Rs 66.80 cr of other income against Rs 3.17 cr in the preceding quarter. This makes the reported earnings growth less representative of operating profit momentum.
Five-day decline was normal for the stock
The stock gained +0.34% on the reaction day but was down -2.54% after five sessions, underperforming the market by -3.36% over that period. Across eight previous results, the median absolute move was 3.49%, with six instances of gains and two of declines, so the latest five-day move was within its established range.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,265 cr | ₹1,323 cr | -4.39% | +13.01% |
| Other income | ₹67 cr | ₹3 cr | +2007.26% | +20775.00% |
| Expenses | ₹1,036 cr | ₹1,084 cr | -4.44% | +14.86% |
| Operating profit | ₹230 cr | ₹240 cr | -4.15% | +5.37% |
| Operating margin (%) | 18.16% | 18.11% | — | — |
| Interest | ₹41 cr | ₹42 cr | -2.45% | -14.54% |
| Depreciation | ₹56 cr | ₹53 cr | +5.92% | +15.36% |
| Profit before tax | ₹200 cr | ₹148 cr | +34.83% | +63.57% |
| Tax | ₹34 cr | ₹19 cr | +81.78% | +107.42% |
| Net profit | ₹165 cr | ₹129 cr | +28.01% | +56.73% |
| EPS (₹) | ₹17.02 | ₹13.77 | +23.60% | +57.45% |
Operating margin of 18.16% compares with a Healthcare sector median of 20.32% across 114 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.34% | -1.26% |
| Next session | -2.97% | — |
| 5 sessions | -2.54% | -3.36% |
| 15 sessions | -3.06% | — |
| 30 sessions | +12.25% | — |
Volume on the results session was 2.06× its 20-day average.
What to watch
- Whether operating margin holds around 18.16% after the 0.05 percentage-point QoQ improvement.
- Whether other income falls from Rs 66.80 cr and its 33.46% share of pre-tax profit.
- Whether expenses grow slower than revenue, reversing the +14.86% versus +13.01% YoY gap.