InvestorQ : What was the reason for the sharp fall in the stock price of Sequent Scientific on 11 August?
swati Bakhda made post

What was the reason for the sharp fall in the stock price of Sequent Scientific on 11 August?

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Sam Eswaran answered.
3 months ago
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The stock may have been a favourite of trades and investors in the last one year since the Carlyle deal, but Sequent Scientific fell by 16% after it reported an 86% fall in its consolidated PAT for the Jun-21 quarter. Of course, in absolute terms, it was not much as the profits fell from Rs.19.35 crore to Rs.2.65 crore. However, the top line revenues were up 8.6% on a yoy basis at Rs.321 crore.

The formulation business reported growth above 15% but the pressure came from the API business, which showed negative growth after several quarters of robust growth. Due to the pressure in the API business, which saw a spurt in input costs, EBITDA was down 23% at Rs.35.8 crore and that is what spooked the markets. In addition, the EBITDA margins contracted by 460 bps to 11.2%.

Meanwhile, Sequent confirmed that the contribution of regulated market business had gone up from 66% to 72% on a yoy basis. Sequent Scientific currently has 8 manufacturing facilities spread across Turkey, Brazil and India with the Indian site at Visakhapatnam being the only site with USFDA approved veterinary API facility.

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