Geojit Investments Limited has maintained a BUY rating on Strides Pharma Science Ltd. (NSE: STAR), setting a revised 12-month target price of Rs 1,352 against a current market price of Rs 1,122 — implying a potential upside of roughly 20 percent. The Kochi-based brokerage's call, authored by research analyst Antu Eapan Thomas, comes after the pharmaceutical company posted an 11 percent year-on-year jump in fourth-quarter revenue, even as a sluggish U.S. business and softening donor-funded procurement tempered the pace of growth. Strides continues to lean on diversification, expanding aggressively into "other regulated markets" and growth geographies while chasing a $400 million revenue target by fiscal 2028.

A Diversified Growth Story Takes Shape

Strides Pharma Science has positioned itself as a vertically integrated, research-driven pharmaceutical player with an experienced leadership team and a footprint spanning multiple therapeutic categories. Geojit's latest company update, dated July 2, 2026, frames the stock's investment case around one central theme: the business is no longer a U.S.-market bet.

Ex-U.S. markets now contribute close to 46 percent of total revenue, a milestone that has meaningfully diluted the company's historical dependence on American sales. This rebalancing act has become the centerpiece of the bull case Geojit is making to investors.

Q4 Numbers: Steady, Not Spectacular

Strides delivered consolidated revenue of Rs 1,323 crore in the fourth quarter of fiscal 2026, up 11.2 percent from Rs 1,190 crore a year earlier and 10.8 percent higher sequentially. EBITDA rose 10 percent year-on-year to Rs 240 crore, aided by improved operating leverage, though escalating raw material costs shaved 20 basis points off margins, which settled at 18.1 percent.

Reported profit after tax climbed 51 percent year-on-year to Rs 129 crore, though it fell sharply — down 37.9 percent — from the previous quarter, a decline largely attributable to one-off items in the base. Adjusted PAT, which strips out exceptional items, stood at Rs 133 crore, up 21.7 percent annually.

The U.S. Slowdown, Explained

Not everything glittered. The company's home turf for growth — the United States — expanded just 2 percent year-on-year in the quarter, a marked deceleration attributed to three distinct headwinds: the deliberate discontinuation of nine products that no longer cleared margin thresholds, a lower-than-anticipated quota allocation for controlled substances, and an unusually mild flu season that dented seasonal demand.

Management, however, isn't retreating from America. The company has reiterated its medium-term target of $400 million in U.S. revenue by fiscal 2028, banking on relaunches from its dormant product portfolio and fresh investment in complex, harder-to-replicate categories — controlled substances, nasal sprays, and so-called 505(b)(2) programs, which cover drugs with modified formulations of already-approved medicines.

Where the Real Momentum Lives

If the U.S. story is one of patience, the international story is one of acceleration. Strides' "other regulated markets" segment — essentially developed markets outside the U.S. — has scaled successfully and is showing what Geojit's report calls strong momentum, with management expecting further acceleration as regional partners roll out additional product launches.

Growth markets, meanwhile, generated $68 million in revenue during the year, a 22 percent year-on-year increase. The company recently deepened its presence here through the acquisition and in-licensing of select Sandoz brands, an arrangement carrying an upfront consideration of approximately $12 million. Regulatory filings are expected to accelerate further, with the newly acquired Sandoz portfolio adding incremental fuel.

One area flagged for caution: access markets, which serve donor-funded and public health procurement programs. Reduced contributions from major institutional funders — the report specifically cites the Global Fund — have led to softer order inflows, and Geojit expects this segment to stay subdued.

Revised Estimates: A Mixed Bag

Geojit trimmed its near-term profitability assumptions while nudging up its revenue outlook. Fiscal 2027 and 2028 revenue estimates were revised upward by 1 percent and 3 percent, respectively, reflecting confidence in the topline trajectory.

Margin estimates were pared back by 130 and 70 basis points for fiscal 2027 and 2028, respectively, as rising input costs bite into profitability even as the topline expands.

The Valuation Case

Geojit's price target of Rs 1,352 is derived by applying a 15x multiple to projected fiscal 2028 earnings per share of Rs 90.1. At the current market price of Rs 1,122, the stock trades at a fiscal 2028 P/E of 12.5x, well below its historical premium levels, giving the brokerage room to argue the risk-reward remains favorable.

The company's balance sheet has also strengthened considerably. Adjusted debt-to-equity has fallen steadily from 1.1x in fiscal 2024 to a projected 0.2x by fiscal 2028, while return on equity is expected to hold near 20 percent. Capital expenditure, Geojit notes, is expected to remain largely stable going forward, freeing up cash flow for continued debt reduction.

Key Levels for Investors

• Current Market Price (CMP): Rs 1,122
• 12-Month Target Price: Rs 1,352
• Potential Upside: Approximately 20%
• 52-Week Range: Rs 770 – Rs 1,231
• Rating: BUY (unchanged from March 2026 call)

Geojit's ratings framework classifies Strides as a small-cap stock, where a BUY designation requires an upside potential exceeding 20 percent — placing this call right at the threshold of its own criteria. Investors should note that Geojit's recommendations operate on a 12-month horizon and remain subject to revision based on valuation shifts, earnings surprises, or material corporate developments.