FDC Shares Soar Over 10%, as Q1 Profit Rises, Board Approves ₹1155 Crore Buyback

In a remarkable display of financial strength and strategic foresight, FDC Ltd. (Fairdeal Corporation) witnessed an extraordinary surge in its shares by over 10% to reach a historic high. This meteoric rise came on the heels of the pharmaceutical giant's robust performance in the first quarter of the fiscal year 2023-24, coupled with significant strategic decisions taken by the company's board.

Impressive Q1FY24 Performance

FDC Ltd. reported an impressive YoY increase in key financial metrics for the first quarter of the fiscal year 2023-24. The consolidated revenue showed a notable surge of 8.4%, amounting to a substantial ₹536.38 crore. The earnings before interest, taxes, depreciation, and amortization (EBITDA) witnessed a remarkable growth of 56.4%, reaching ₹122 crore. This surge in EBITDA also translated into improved EBITDA margins, which stood at an impressive 22.75% as compared to 15.77% in the corresponding period last year. The company's net profit soared by an impressive 55.4%, totaling ₹109.81 crore.

Strategic Moves to Fuel Growth

FDC Ltd.'s board demonstrated its commitment to maximizing shareholder value through strategic initiatives that are set to position the company for sustained growth. The company's decision to buy back shares, up to 31 lahks or 1.87% of total shares, at ₹500 per share, shows that the management is confident about the company's future success.

Furthermore, the company's board endorsed the acquisition of an additional 7% stake in its subsidiary, FDC SA, from existing shareholders. This strategic move not only strengthens the company's ownership in its subsidiary but also underlines its commitment to enhancing its core businesses. The board's decision to settle the outstanding loan of these shareholders with interest demonstrates a proactive approach to optimizing the company's financial structure.

Geographical Expansion and Global Reach

FDC Ltd. has consistently expanded its global footprint, exporting its products to more than 50 countries worldwide. Over the years, international sales have grown significantly, contributing to 26% of total sales in FY21, up from 15% in FY17. The United States stands as a major driver of export sales, accounting for an impressive 52% of the company's total sales. Other prominent markets include Denmark, the United Kingdom, Singapore, Nepal, New Zealand, Japan, Malaysia, Hong Kong, and Ethiopia.

The company's overseas ventures are supported by its wholly owned subsidiaries: FDC Inc., USA, and FDC International Ltd., UK. These entities play a pivotal role in driving FDC Ltd.'s international and overseas operations. Additionally, FDC Ltd. holds a 49% stake in the joint venture, Fair Deal Corporation Pharmaceutical SA Pty Ltd, based in South Africa. The company's ongoing efforts to acquire an increased stake in this joint venture highlight its dedication to strengthening its global presence.

Market Performance and Analyst Insights

The stock market responded positively to FDC Ltd.'s exceptional performance and strategic moves, as evidenced by the 7.63% rise in the company's share price to Rs 418.8 apiece. During intraday trading, the stock price surged by as much as 10.24% to a record high of ₹428.95 apiece. The year-to-date rise of 49% in the company's stock showcases investors' growing confidence in its future prospects.

Analysts tracking FDC Ltd. have recognized the company's proactive approach to enhancing shareholder value and expanding its global presence. However, it's worth noting that the relative strength index (RSI) currently stands at 85, indicating a potential overbought condition. This observation suggests that investors should exercise caution and conduct thorough research before making investment decisions.