This Mukul Agrawal-owned stock crossed Rs 10,000-mark; up 725% in 2 years

Shares of Neuland Laboratories crossed the Rs 10,000 mark for the first-ever time in intra-day deals on Friday. The stock hit a new high of Rs 11,093.15, on rallyig 18 per cent on the BSE in an otherwise weak market on the back of robust earnings for the June 2024 quarter (Q1FY25). In comparison, the BSE Sensex was down 0.80 per centat 81,196 at 01:50 pm.

In the past two days, the stock of this smallcap pharmaceutical company has surged 27 per cent. It has zoomed 83 per cent in the past two months and has skyrocketed 725 per cent in two years.

Investor, Mukul Mahavir Agrawal holds 400,000 shares representing 3.12 per cent stake in Neuland Lab at the end of June quarter, the shareholding pattern data shows.

Neuland Labs is a pharmaceutical manufacturer providing active pharmaceutical ingredients (APIs), complex intermediates and custom manufacturing solutions (CMS) services to customers.

The company recorded its highest-ever quarterly revenue in Q1FY25 at Rs 444.4 crore led by growth in the CMS business even as the company recorded healthy earnings before interest, taxes, depreciation, and amortization (EBITDA) margins at 28.9 per cent, up 174 bps over Q1FY24. Profit after tax jumped 58 per cent year-on-year at Rs 98.3 crore from Rs 62.2 crore in a year ago quarter.

The management said the company continues to maintain that FY25 will be a year of normalisation of revenue growth and subsequently margins as the company continue to invest for growth. The management expects the company’s business to regain momentum from FY26 onwards basis visibility from portfolio of projects and products.

Neuland Labs has become a global player, operating in more than 80 countries with exports comprising over 78 per cent of its total revenue. The US and Europe are its largest export markets, accounting for more than 79 per cent of its total exports. Additionally, the Company has filed over 499 Drug Master Files (DMFs) with European regulatory authorities, 67 DMFs with the US Food and Drug Administration (USFDA) and several DMFs with health regulatory bodies in Canada, Japan, Korea and Australia.

By targeting new growth opportunities with a shift in business strategy, the management remains optimistic of continued strong financial performance in the coming periods.

Neuland Labs in its FY24 annual report said the company has numerous strategic opportunities to increase its market presence and drive growth.
Focusing on increasing the wallet share with existing clients to strengthen relationships and adapt product offerings to their evolving needs.

The company prioritising regulated markets and quality conscious customers, ensuring compliance with strict regulations to enhance credibility and market competitiveness. The company is commercialising pipeline compounds and pursuing first-to-market and NCE-1 opportunities to propel future growth.

Projections indicate that India's API manufacturing sector will experience a Compound Annual Growth Rate (CAGR) of 13.7 per cent in the coming years. This forecast is supported by several factors, including a robust domestic market, a leading chemical industry known for its innovation, a highly skilled workforce and operational costs that are approximately 40 per cent lower compared to Western countries. Moreover, India's commitment to maintaining rigorous quality standards promotes its reputation and strengthens its position in the global API market, the company said.