Why Wockhardt Share Price is Rising

When we talk about pharma players, Wockhardt is not one of the first names that comes to mind.

Because of its past track record (high promoter pledging, FCCB turning fad in 2008, etc.) investors have always given it a miss and considered better growth stories.

The company does not even have a healthy track record. It has reported losses in 4 out of the last 5 financial years.

However, things have started to turn around for the company.

On 1 July 2024, Wockhardt shares spiked over 15% to reach 2021 levels.

In fact, in 2024 so far, the stock price is up over 70%.

Let's take a closer look at this pharma player today.

Why Wockhardt Share is Rising

#1 New Cancer Treatment

The primary reason behind the steep rise in Wockhardt shares in recent sessions could be attributed to the company's successful use of WCK 5222 (Zaynich) to treat cancer patient in the US.

The company's chairman said last week on Friday that it plans to introduce the drug in India at a significant discount of 85-90%.

In the US, the drug is priced at around US$15,000.

This drug is expected to be commercially available in India by 2025, with commercialisation in Western markets anticipated in late 2026.

#2 Fundraising

The other reason why shares of the pharma company have been in focus for the past one month is because it's planning a fund-raising.

This is not the first fund-raise that the company is conducting this year. In March this year, it acquired funds from investors including Madhusudan Kela and Prashant Jain for its Rs 4.8 billion (bn) qualified institutional placement (QIP).

The company intends to spend 50% of the funds from the fund raise towards research programs, while the remainder will be used for operating working capital and debt repayment.

What Next?

While things may have not worked according to the plan in the past, Wockhardt has strong growth plans this time and it's looking to capture the opportunities in emerging markets.

The company has an established track record in India, as well as the UK and Ireland pharma markets.

The recent fund raise has improved the company's liquidity position while the upcoming one is also expected to bode well.

In the past 5 years, the company has witnessed flat growth in topline. It did see a jump in pandemic year owing to supply of vaccines but that also came down in FY23 following a sharp decline in vaccine supply.

Financial Snapshot

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	28,440	27,080	32,300	26,510	27,980
Growth (%)	-20%	-5%	19%	-18%	6%
Operating Profit	1,578	690	3,180	2,230	1,220
OPM (%)	6%	3%	10%	8%	4%
Net Profit	-692	6,860	-2,440	-5,590	-4,630
Net Margin (%)	-2%	25%	-8%	-21%	-17%
ROE (%)	-5.2	-9.9	-7.8	-17.3	-14.1
ROCE (%)	-1.1	-5.5	-2.0	-5.9	-2.2
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	1.2	0.7	0.5	0.6	0.6

Data Source: Ace Equity

Going forward, the company is looking to expand its portfolio to include biologicals, new insulins, and other diabetic products.

It's also aiming to enter the biosimilar space within the next 3-4 years.

How Wockhardt Share Price has Performed Recently

In the past 1 month, Wockhardt share price is up over 50%.

In the past 5 days, the stock is up 34%.

Wockhardt has a 52-week high of Rs 808 touched today and a 52-week low of Rs 213.25 touched on 26 October 2023.

In the past 1 year, Wockhardt share price is up 243%.

Here's a table comparing Wockhardt with its peers -

Comparative Analysis

Company	Wockhardt	Dishman Carbogen	GSK Pharma	Indegene	Sanofi India
ROE (%)	-14.1	-175.0	33.4	23.6	87.2
ROCE (%)	-2.2	-0.7	46.5	28.8	115.2
Latest EPS (Rs)	-30.1	-9.8	34.8	14.1	238.4
TTM PE (x)	0.0	0.0	76.2	39.5	27.2
TTM Price to book (x)	3.2	32.2	25.2	4.1	13.8
Dividend yield (%)	0.0	0.0	1.2	0.0	2.6
Industry PE	39.7
Industry PB	5.2

Data Source: Ace Equity, Equitymaster

About Wockhardt

Wockhardt is an Indian pharma and biotechnology company.

It produces formulations, biopharmaceuticals, nutrition products, vaccines and active pharmaceutical ingredients (APIs).

As of March 2024, promoters of the company hold 51.6% stake in then company.

Interestingly, promoters have reduced their holding for the past 8 consecutive quarters.

The promoter pledging has come down in the most recent quarter. To know more, check out the detailed shareholding here.

You can also have a look at Wockhardt's factsheet and quarterly results on our website.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...