Senores Pharma stock fall 7% despite reporting 113% YoY increase in net profit; Check the reason

Synopsis: The pharma stock slipped nearly 7% despite strong annual growth, as sequential performance remained modest and valuations stayed elevated. With a PE around 40 versus an industry average near 30, a limited margin of safety, market volatility, and cautious sentiment likely weighed on investor confidence.

The shares of a high-quality complex generics manufacturer plummeted by 7 percent in today’s trading session despite the company reporting its highest-ever revenue in Q3FY26.

With a market capitalization of Rs 3,512.05 crore, the shares of Senores Pharmaceuticals Ltd were trading at Rs 763.00 per share, decreasing around 5.40 percent as compared to the previous closing price of Rs 806.55 apiece.

Q3FY26 Highlights

The shares of Senores Pharmaceuticals Ltd have seen bearish movement after announcing its financial performance in Q3FY26, in which revenue increased by 70 percent on a year-on-year basis from Rs 103.02 crore in Q3FY25 to Rs 175 crore in Q3FY26. However, on a Quarter-on-Quarter basis, revenue zoomed by 9 percent from Rs 161 crore in Q2FY26 to Rs 175 crore in Q3FY26.

Moreover, net profit increased by 113 percent on a yearly basis from Rs 16 crore in Q3FY25 to Rs 34 crore in Q3FY26, meanwhile, on a quarter-on-quarter basis, net profit increased by by 13 percent from Rs 30 crore in Q2FY26 to Rs 34 crore in Q3FY26.

The company delivered strong performance in regulated markets, with Q3 FY26 revenue rising 60.5% year on year to  Rs 112.7 crore and EBITDA margin at a robust 40%. For 9M FY26, revenue grew 71.5% to  Rs 309.6 crore with similar margins. Emerging markets showed modest scale, with lower EBITDA margins of 13% in Q3 and 9% over 9M FY26.

During the quarter, Senores continued to strengthen its regulated markets pipeline, with 46 approved ANDAs covering 137 strengths, and over 100 strengths yet to be launched. A further 22 ANDAs, involving more than 50 strengths, remain under development, providing long-term visibility for growth in regulated markets.

Valuation Appears Stretched

The results reflect a mixed performance, with the company delivering strong year-on-year growth but only marginal improvement on a quarter-on-quarter basis. The limited sequential growth may have tempered investor expectations. Additionally, broader market volatility and a prevailing downward trend have likely added pressure on the stock, despite the fundamentally healthy annual performance.

Furthermore, Senores Pharmaceuticals Ltd is trading at a relatively stretched valuation, with a PE of around 40.4, well above the industry average of 29.6. Firstly, this indicates the stock is priced aggressively versus peers. Secondly, such a premium leaves little margin for error and could increase downside risk if growth expectations or sector sentiment disappoint.

Senores Pharmaceuticals is a research-driven pharma company focused on developing and manufacturing complex generic medicines for regulated markets. The company emphasizes quality, compliance, and niche product capabilities, catering mainly to the US and other advanced global markets with stringent regulatory standards.

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