Gland Pharma share price: Gland Pharma stock lose 24% of its value in 3 days. What’s spooking investors?

By Jason Junior On Oct 31, 2022

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Shares of fell as much as 24% to Rs 1,681 per share in the last three trading sessions on the BSE after the company reported a fall of 20.14% in consolidated net profit to Rs 241.24 crore due to lower sales and higher expenses. In the second quarter of FY22, the profit after tax (PAT) was Rs 302.08 crore.

The consolidated revenue from operations of the company during the September quarter of FY23 was at Rs 1,044.4 crore, as against Rs 1,080.47 crore in the year-ago period, which represents a y-o-y fall of 3.33%. Revenue from operations during the quarter has improved by 22% as compared to the first quarter of the current financial year when it was Rs 856.89 crore.

In Monday’s intraday trade, the stock fell as much as 10.24% to Rs 1,681 from its previous day’s closing price of Rs 1,872.85 per share.

Gland Pharma said revenue from its core markets of the US, Europe, Canada and Australia grew by 3 per cent to Rs 747.5 crore in the second quarter, as against Rs 722.5 crore in the corresponding period last fiscal.

However, its India revenue was down 42 per cent to Rs 72.6 crore, as compared to Rs 125.8 crore in the year-ago quarter, while the same for the ‘rest of the world’ market was also down 3 per cent at Rs 224.3 crore, as against Rs 232.2 crore.

Brokerage firm Nomura maintained its neutral rating on Gland Pharma with a target price of Rs 2,236 based on 25x Sep 2024F EPS of Rs 89.5.

“Our valuation multiple remains unchanged. The valuation multiple has declined over the past year as growth and margin uncertainty have increased. We expect the stock to trade close to the current trading multiple with a downside bias. We maintain our ‘neutral’ rating on the shares of Gland Pharma,” Nomura said.

“Injectable companies (HIKMA, HOSIPORA, and Aurobindo) in the US market sales grew by ~4% YoY, we expect similar growth for Gland Pharma in core markets over a longer period and high double-digit growth in India &RoW. FY23 seems to be flat revenue growth due to increased competition and moderation demand for Gland Pharma, therefore we recommend a hold rating with a target price of Rs 2,100,” said Axis Securities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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