Up to 27% upside potential! Here's why Motilal Oswal is bullish on Gland Pharma stock

Shares of Gland Pharma have delivered 50 per cent return in the last 12 months. The stock is still trading 25 per cent lower than its 52-week high of Rs 2,195.75, hit on February 7, 2024. However, it has recovered over 100 per cent from its 52-week low of Rs 861.50.

Motilal Oswal, in its recent report, said that Gland Pharma has seen an encouraging revival in its business performance in the 9 months of FY24 after a weak FY23.

The revival in sales in the company’s core markets has been driven by new launches and the relaunch of certain products. It finds the valuation attractive and values Gland at 27x12M forward earnings to arrive at a target price of Rs 2,240.

With the resolution of supply chain issues, it believes that Gland is expected to clock a 16 per cent CAGR in sales to Rs 3,300 crore compared to a modest 2 per cent sales CAGR over FY22-24.

It added that the company is also working on new registrations and adding new markets in the Rest of the World (ROW) segment. Further, the company is also adding new areas of growth through mergers and acquisitions and organic routes.

"In addition to its base business, the company is building additional levers to improve growth prospects. The company has expanded its CDMO offerings in the European market through the Cenexi acquisition," it said.

"Access to niche technologies and a robust customer base would enable Gland to establish its presence in the CDMO space. Additionally, the company has invested in developing capabilities in the biosimilar space to expand differentiated offerings," Motilal Oswal said.

The brokerage firm expects Gland to deliver a 20 per cent earnings CAGR over FY24-26 on the back of superior performance in core markets of US/EU/Canada/Australia and ROW markets, supported by improving Cenexi operations.

About Gland Pharma Limited

The company is a generic injectable-focused company. It specialises in complex injectables and is engaged in the sterile injectables, oncology, and ophthalmology segments.

It also provides contract development, own development, dossier preparation and filing, technology transfer, and manufacturing across a variety of delivery systems.

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