Gland Pharma hits 52-week low on disappointing Q2, brokerages cut price target

Share price of Gland Pharma opened 9.5 percent lower on October 27 as investors dumped the stock after a disappointing show in the second quarter of FY23.

At 10:30 am, the stock was quoting at Rs 1,915 on the National Stock Exchange, down by 13.90 percent, after hitting a 52-week low of Rs 1,912.

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The pharmaceutical company reported a 20 percent year-on-year decline in profit at Rs 2,41.2 crore for quarter ended September FY23, dented by weak topline as well as operating performance.

Revenue for the quarter fell 3 percent to Rs 1,044.4 crore compared to year-ago period, impacted by lower business from India and Rest of World, while core markets (US, Europe, Canada and Australia) recorded 3 percent YoY growth.

“We continue to make investments in R&D and were able to complete 6 ANDA filings during this quarter. Although we have seen increased competition in our new products, we remain confident of our launch pipeline that will ensure sustainable growth,” Srinivas Sadu, MD & CEO of the company said.

Citi has a Sell call on the stock with target price cut to Rs 1,920 from Rs 2,140 per share. “The company reported another weak set of numbers with 11 percent/14 percent miss at EBITDA/PAT. Margins declined largely led by change in mix and increased competition,” the global brokerage said.

Goldman Sachs has a Buy call on the stock with target cut to Rs 2,530 per share. “Growth in the U.S. business was offset by decline in India and rest of the world. We cut FY23-FY25 EPS estimates by 5-9 percent,” it noted.

Meanwhile, Jefferies has downgraded the stock to Hold rating with target cut to Rs 2,241 from Rs 2,843 per share. As supply chain challenges will continue to pose growth and margin headwinds, the brokerage has cut FY23/24 EPS estimates by 11 percent/15 percent.

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