Emkay Global Financial has given Buy recommendation for Gland Pharma with a target price of Rs. 5000 in its research report issued on Nov 29, 2021
Emkay Global Financial’s report on Gland Pharma
We hosted Gland Pharma management for a two-day non-deal roadshow in Mumbai to meet investors. Management commentary boosted our confidence in its unique business model, which is expected to benefit from increasing competition in generic injectables. While the company steadily increases its portfolio offerings to existing customers such as Apotex, Fresenius Kabi and Pfizer (Hospira), it is also gaining traction with recent entrants into the US generic injectables market such as Alembic Pharma. Management views the biologics business as a natural extension of its injectables capabilities. While the company might have to depend on parent Fosun Pharma initially, it expects to leverage its current client relationships to build an accretive business.
We remain positive on Gland Pharma on the back of strong growth and visibility into profitability. We estimate revenue/EBITDA/net profit CAGRs of 25%/25%/27% (FY21- 24e). Strong growth should also boost Gland’s industry-leading return ratios further.