Buy this pharma stock for high returns, company sales in India surge 137%: Motilal Oswal

Gland Pharma: target price, CMP and performance

The current market price (CMP) of Gland Pharma is Rs. 3,096. Motilal Oswal has estimated a target price for the stock at Rs. 3,700. The stock is expected to yield a return of +20%, within 1 year.

Stock market outlook
Current market price (CMP) Rs. 3,096
Target price Rs. 3,700
1 year back 20.00%

Gland Pharma posted online performance in Q4FY22. The India/Rest of World (RoW) markets led revenue growth in 4QFY22. Company revenue increased 24% YoY to Rs. 11b, and India/RoW/Core Markets sales increased 137%/32%/8% YoY to Rs. 2b/ Rs. 1.9b/ Rs. 7.1b (18%/17%/65% of sales). However, gross margin contracted 530 bps year-over-year to 50.6% due to changes in the geographic mix. EBITDA margin contracted 530 bps year-over-year to 31.6% due to lower gross margin. Gland Pharma’s EBITDA margin contracted 530 bps year-on-year to 31.6% due to a lower gross margin. On the other hand, its adjusted PAT grew at a higher rate (~10% YoY) to Rs. 2.9 billion, helped by higher other income and slightly lower tax, and EBITDA grew at a moderate rate of 6% year-on-year at Rs. 3.5b.

Motilal Oswal: Benefits and Risks of Stock

Motilal Oswal: Benefits and Risks of Stock

Maintaining the buy rating for Gland Pharma shares, Motilal Oswal said: “We remain positive on GLAND, given: the significant opportunity to increase market share of existing products; its enhanced capabilities in peptides, hormones, long-acting injectables, delivery systems, biologics; its consistent and successful compliance history; and (d) inorganic growth opportunities. In Q4FY22, the company performed considerably well, its Sales/EBITDA/PAT increased by 27%/16%/21.5% YoY to Rs. 44b/ Rs. 15.1b/ Rs. 12.1b in FY22. Gland Pharma also derived 5% of its revenue from new launches in FY22. The company’s sales in the main market increased by around 16% year-on-year to Rs. % of sales, according to the recent report.

However, indicating the stock’s risks, the brokerage firm said: “We are reducing our EPS estimate for fiscal year 23/24 by 6% each to account for the prolonged impact of a syringe shortage; increased operating costs due to higher electricity charges, freight costs, and packaging cost; approval delays for the Chinese market caused by Covid, offset to some extent due to increased captive API provisioning.”

About the company: Gland Pharma

About the company: Gland Pharma

A holistic focus of healthcare delivery through a portfolio of injectable products in various therapeutic segments and delivery systems has helped the company expand to 7 manufacturing plants in India with a capacity of around 750 million ‘units. These include four facilities with 22 production lines for finished formulations and 3 active pharmaceutical ingredient (API) facilities. They are present in the sterile injectables, oncology and ophthalmology segments, and focus on complex injectables, including NCE-1s, First-to-File products and 505(b)(2) filings. ). The company remained on track to develop a complex product pipeline and build manufacturing infrastructure to support commercialization. The reputable pharmaceutical player is using all the levers – geographic expansion, new product launches and volume expansion – to grow the RoW market business.

(Also read: Top 4 debt-free stocks, up to 6.78% dividend yield to check, when interest rate rises)

Warning

Warning

The stock above was taken from Motilal Oswal’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.

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