Buy Gland Pharma; target of Rs 4040: Motilal Oswal

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Motilal Oswal's research report on Gland Pharma

GLAND has 11 injectable products in the USFDA shortage list, which have combined sales of ~USD400m over the past 12-months. The overall number of drugs under shortage in the US has declined to a 15-year low at present. However, the number of injectables facing a shortage is at its 20-year average, but is at a record high as a percentage of total drug shortages. Among the Indian players present in the US, GLAND appears to be the largest beneficiary from drugs under shortages due to consistent compliance and manufacturing capacity/capabilities.

Outlook

We value GLAND at 35x 12-month forward P/E to arrive at our TP of INR4,040. We remain positive given: a) its niche product pipeline in injectables, b) volume gains in existing products, c) wider market operations for its portfolio, d) a strong cash cushion for inorganic growth, and e) consistent compliance.

More Info

At 14:17 hrs Gland Pharma was quoting at Rs 3,254.90, up Rs 57.25, or 1.79 percent.

It has touched an intraday high of Rs 3,263.60 and an intraday low of Rs 3,207.25.

It was trading with volumes of 2,946 shares, compared to its thirty day average of 4,785 shares, a decrease of -38.43 percent.

In the previous trading session, the share closed down 0.21 percent or Rs 6.80 at Rs 3,197.65.

The share touched its 52-week high Rs 4,324.65 and 52-week low Rs 2,551.00 on 13 August, 2021 and 19 April, 2021, respectively.

Currently, it is trading 24.74 percent below its 52-week high and 27.59 percent above its 52-week low.

Market capitalisation stands at Rs 53,478.89 crore.

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