Aarti Drugs share has turned into a multibagger during the coronavirus crisis. Aarti Drugs stock has risen over six times in last six months. An investment of Rs 1 lakh in this stock on April 7 this year would have turned to Rs 6.13 lakh today.
On April 7, the stock stood at Rs 152.79 on BSE . The stock was trading at Rs 937.40 on BSE today, logging a rise of 513% during six months. The stock has zoomed by 542% from its 52-week low of Rs 105.56 hit on March 19, 2020 when market was hit by negative sentiment due to Covid-19 crisis. In comparison, the pharma firm's peers have lagged behind in terms of returns on bourses in last six months.
The meteoric rise in the share price can be attributed to strong financial performance of the firm recently. Announcement of bonus issue has also boosted sentiment around the stock.
While Sun Pharma share could rise 22.5%, stock price of another pharma major Dr Reddys Labs could gain 42% during the same period.
Share price of Cipla has risen 57% since April 7.
The firm reported a 280.62% rise in Q1 net profit to Rs 85.45 crore against profit of Rs 22.45 crore in Q1 of last fiscal. In March quarter of previous fiscal, the firm logged a 11.90% fall in net profit to Rs 110.35 crore. Management was confident of clocking profit after tax growth of 15-20% over the medium term on the back of ongoing capital expenditure.
Management expects growth in agro/pharma to compensate for weak demand in other segments such as auto and textiles. Sales rose 34.34% to Rs 544.67 crore in Q1 against Rs 405.43 crore during the corresponding quarter ended June 2019.
Number of foreign portfolio investors owning the stock rose to 41 in Q1 against 31 in Q4 of last fiscal.
Number of shareholders with share capital up to Rs 2 lakh rose to 21,421 in Q1 against 17,601 in Q4 of last fiscal. For quarter ended June, earnings per share (EPS) rose to Rs 31.34 against 9.19 in June quarter 2019.
In Q4 of previous fiscal, EPS stood at Rs 24.28. The pharma firm logged its higher profit ever in last fiscal despite slowdown in global and Indian economy. It reported Rs 141.40 crore net profit in last fiscal compared to Rs 89.75 crore profit in corresponding period of previous year.
Sales rose 15% to Rs 1806 crore in FY 19-20 against Rs 1560 crore in FY18-19. Earnings per share climbed to Rs 60.57 in last fiscal against Rs 38.48 in 2018-19 fiscal. Return on equity stood at 21.67% in FY 19-20 against 16.51% in FY 18-19.
Debt to equity ratio fell to 0.52 in last fiscal against 0.87 in FY 18-19 and 1.12 in FY17-18 which implied the firm improved its financial performance despite reducing debt.
A nod to the bonus issue of shares by its board also led to a significant rally in the stock. Aarti Drugs share price rose 20% intra day on August 20 to Rs 2,892.75 against previous close of Rs 2410 on BSE. Later, the share closed 17.76% or Rs 428 higher at Rs 2,838.
Of late, the share has gained 27.6% returns in the last 5 days. The share closed at all-time high of Rs 937.75 today, gaining 5% on BSE. The stock opened with a gain of 5% at Rs 937.75 against previous close of Rs 893.10 on BSE.
The midcap share has risen 724.4% in one year and gained 548.85% since the beginning of this year. In a month, the share has given 32.57% returns on BSE.
Total 1.94 lakh shares of the firm changed hands leading to turnover of Rs 17.98 crore.
Aarti Drugs Limited is a pharmaceutical company. The company offers active pharmaceutical ingredients (APIs) in a range of therapeutic categories, such as anti-inflammatory, cardioprotectant, antifungals, antibiotic, antidiabetic, sedative and vitamins. Its products under APIs include Aceclofenac, Diclofenac Potassium, Diclofenac Diethylamine, Clopidogrel Bisulphate and Telmisartan.