Buy Gland Pharma, target price Rs 1700: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Gland Pharma with a target price of Rs 1700. The current market price of Gland Pharma is Rs 1349.45.

Gland Pharma, incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 22233.18 Crore) operating in Pharmaceuticals sector.

Gland Pharma key Products/Revenue Segments include Pharmaceuticals, Sale of services and Export Incentives for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 1110.03 Crore, up 19.19 % from last quarter Total Income of Rs 931.29 Crore and down -1.91 % from last year same quarter Total Income of Rs 1131.67 Crore. Company has reported net profit after tax of Rs 241.24 Crore in latest quarter.

The company’s top management includes Mr.Yiu Kwan Stanley Lau, Mr.Essaji Goolam Vahanvati, Mr.Satyanarayana Murthy Chavali, Dr.Jia Ai (Allen) Zhang, Mr.Udo Johannes Vetter, Ms.Xiaohui Guan, Mr.Yao Fang, Mr.Yifang Wu, Mr.Qiyu Chen, Mr.Srinivas Sadu, Ms.Naina Lal Kidwai. Company has S R Batliboi & Associates LLP as its auditors. As on 31-12-2022, the company has a total of 16 Crore shares outstanding.

Investment Rationale
Considering near-term business headwinds, the brokerage expects a 22% earnings decline YoY in FY23. However, with the resolution of issues, a better business outlook for biologics/China and the addition of Cenexi’s business, Motilal Oswal expects a 17% earnings CAGR over FY23-25. The 58% fall in the stock price in the past one year already factors in the deterioration in the business outlook.