Holdings of three discretionary trusts named after the children of late legendary investor Rakesh Jhunjhunwala, are not spared in the current market correction. Jhunjhunwala was known for picking quality stocks in his portfolio amid the falling markets and has lost nearly Rs 1,600 crore in just two sessions from a single stock, which has tanked as much as 30 per cent during this period. Interestingly, these three Jhunjhunwala trusts own nearly one-fourth of the company.
We are talking about Concord Biotech, which has plunged to the lows of Rs 1,482.15 on Monday, falling another 12.46 per cent for the day. The stock had settled at Rs 1,693.20 on Friday, after a sharp 19.75 per cent fall. The stock has plunged nearly 30 per cent in the two trading sessions and its down 45 per cent from its 52-week high at Rs 2,658 hit in September 2024.
As per the latest shareholding pattern, Jhunjhunwala owned 2,51,99,240 equity shares, or 24.09 per cent stake in the company as of December 31, 2024. This stake has remained unchanged ever since its listing in August 2023. However, the value of this stake crumbled about Rs 1,590.42 crore to Rs 3,730.90 on Monday from Rs 5,321.32 crore on Thursday.
However, this stake is individually owned by Nishtha Jhunjhunwala Discretionary Trust, Aryaman Jhunjhunwala Discretionary Trust and Aryavir Jhunjhunwala Discretionary Trust. The former one owns 83,99,732 equity shares, or 8.03 per cent stake in the company, while the latter two hold 83,99,754 equity shares, or 8.03 per cent stake each as of December 2024 quarter.
The steep fall in the stock prices shall be attributed to the feeble sentiments for the broader markets and muted Q3 earnings by the pharma player, mainly a miss on the margins front. Concord Biotech manufactures Active Pharmaceutical Ingredients (API) through fermentation & semi-synthetic process. Its product portfolio includes more than 30 products across therapy segments.
In Q3FY25, Concord Biotech reported a 2 per cent YoY decline in consolidated net profit to Rs 75.9 crore as compared to Rs 77.6 crore a year ago. Its revenue for the quarter under review stood at 244.2 crore, reporting a marginal rise of 1 per cent YoY. Ebitda for the quarter dropped 7.46 per cent YoY to Rs 98 crore, while margins contracted nearly 400 basis points to 40.1 per cent.
The API segment, contributing 72 per cent of revenue, experienced a slowdown due to delayed customer orders following stockpiling in the previous quarter, said Choice Broking. The formulations segment, accounting for 28 per cent of revenue, experienced a decline due to calendar year-end closures for global clients and tender delays, resulting in a shift of revenue, it said.
"Management anticipates these orders to materialize in Q4. Customer transitions to the Limbasi facility progressed slower than expected. The growth in injectable facilities is anticipated to be a key long-term driver, enhancing both revenue and profitability. We anticipate Concord will benefit from the scaling up of its Limbasi facility, driving growth in the API segment, along with market expansion and product launches," Choice added.
Choice Broking has with a 'buy' rating a target price of Rs 2,207 on Concord Biotech. Among other brokerage firms, Antique Stock Broking has a 'buy' rating on the stock with a target price of Rs 2,187, while Kotak Institutional Equities has maintained its 'add' rating with a target price of Rs 2,050 on the stock.
Concord Biotech is known for its products and has a presence in more than 70 countries globally with efficient distribution infrastructure in markets like the USA, Europe, Japan, Latin America, Africa, Asia, besides significant presence in the Indian market. It has two API manufacturing units and one finished formulation unit, all located near Ahmedabad, Gujarat.