Gland Pharma shares up 6% today. Motilal Oswal sees stock at Rs 1,920

Shares of Gland Pharma Ltd gained over 6 per cent in Tuesday's trade even as the drug maker reported a 20 per cent-on-year (YoY) decline in profit for the September quarter on account of higher depreciation, finance costs and tax expenses. Analysts said Gland's operational performance was in-line. They noted that Cenexi, a part of the company's business, experienced temporary shutdown due to an annual summer closure in France and Belgium that resulted in only partial revenue booking for the quarter, even as fixed costs were incurred for the entire quarter.

The stock climbed 6.33 per cent to hit a high of Rs 1,674.60 on BSE.

"After posting a 31 per cent earnings decline YoY in FY23 due to several headwinds, Gland Pharma's base business is back on track with a superior performance. It continues to enhance its complex portfolio, with one FTF product already filed and at least two to be submitted to regulatory authorities soon. The company has also expanded its facility for the plasma protein portfolio," said Motilal Oswal Securities.

The brokerage, which has a target price of Rs 1,920 on the stock, said core markets and India showed superior performances, with a normalisation in certain key products, adding that Gland Pharma continued its effort to improve the operational performance of Cenexi. Motilal’s target price on Gland Pharma suggests a 15 per cent potential upside over Tuesday’s intraday levels.

Gland Pharma, said Arihant Capital Markets, demonstrated robust revenue growth and a proactive approach to optimising operations and regulatory compliance, positioning it for continued success in the future.

As per the management, out of total 14 launches in the US market, four were new to market, while the remaining were relaunches. Excluding Cenexi, Gland Pharma achieved Ebitda margin of 34per cent. It expects to sustain margin at 30-32 per cent.

Over the next 12-18 months, Motilal Oswal Securities noted, the company plans to invest 60 million Euro in Cenexi to improve its capacity and operational efficiency.

Gland, along with its partners, filed 1 ANDA and received 5 approvals in the September quarter. Motilal Oswal Securities expects a compounded annual growth rate of 30 per cent in sales, 23 per cent in Ebitda and 14per cent PAT over FY23-25.

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