Astrazeneca Pharma Posts Losses In March 2013 Quarter

Astrazeneca Pharma posted a loss of Rs 18.57 crore for Q4FY13 against that of Rs 33 crore a year earlier. It witnessed a marginal rise in its topline from Rs 91.68 crore in Q4FY12 to Rs 94.85 crore in Q4FY13. This is the fifth consecutive quarter in which this MNC pharma company has posted a quarterly loss.

For the full year, the company has reported a 26% decline in its topline to Rs 390 crore. Owing to the losses posted in each quarter of FY13, it has posted a full year loss of Rs 89 crore.

It is no wonder then, that the shares of Astrazeneca have steeply underperformed the markets. While most pharma companies have yielded huge returns on the bourses, this one has tanked 64% in the last 13 months. The net worth of the shareholders in the company has also eroded by nearly 50%, showing that competition has taken a huge toll.

The revenues from the healthcare business, which is its major segment, have declined in the fiscal, with the margins running into negatives. The EBITDA margins of the firm were also in the red during the quarter, pretty much continuing the story seen over the last four quarters.

Astrazeneca’s shareholding pattern for March 2013 indicates that its foreign promoters hold a 90% stake. As per the SEBI guidelines, the company has to bring the promoter stake down to 75% by June 2013. Taking into consideration its price as on May 22, 2013 the company will have to raise Rs 290 crore (USD 53 million) in order to comply with the regulator’s mandate, which seems difficult considering its consistently poor financial performance. We remain absolutely bearish on the stock, and give it an exit rating.