Sharekhan has given Buy recommendation for Gland Pharma with a target price of Rs. 2260 in its research report issued on Oct 27, 2022
Sharekhan’s research report on Gland Pharma
Gland reported another weak quarter in Q2FY23 affected by muted performance across geographies. Core markets marginally grew by 3%, RoW declined by 3% while India business was down by 42% y-o-y which led to 3% y-o-y decline in revenue to Rs. 1,044.4 crore. Gross/EBITDA margins fell by 124/644 bps y-o-y impacted by decline in revenue, unfavourable geography and product mix, pricing pressures in some products and higher employee expenses. PAT declined by 20.2% y-o-y to Rs. 241.2 crore. Despite near-term headwinds due volume decline in the US and cost inflation, the medium-term prospects are intact led by a strong product pipeline and entry into newer markets.
Stock has corrected by 41% in the past six months and currently trades at 29.8x/23.6x its FY2023E/FY2024E EPS, which factors in near-term headwinds. We retain a Buy recommendation on Gland Pharma (Gland) with a revised PT of Rs. 2,260.