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Gland Pharma shares hit 52-week low after profit declines 15% in Q3

Gland Pharma Q3: Revenue from operations for the quarter at Rs 938 crore declined 12% compared to year-ago period.

January 24, 2023 / 09:29 AM IST
Gland Pharma

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Gland Pharma share price fell 4 percent and touched 52-week low in the early trade on January 24 after the company posted a weak set of numbers for the quarter ended December 2022.

Gland Pharma has reported a 15 percent on-year decline in profit at Rs 232 crore for December FY23 quarter with lower topline as well as weak operating performance.

Revenue from operations for the quarter at Rs 938 crore declined 12 percent compared to year-ago period.

Gland Pharma has touched 52-week low of Rs 1,309 and quoting at Rs 1,320, down Rs 57.35, or 4.16 percent on the BSE.

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Here is what brokerages have to say about stock and the company post December quarter earnings:

Motilal Oswal

The brokerage maintained the 'buy' stand on the stock with a target price of Rs 1,700.

The brokerage house cut its EPS estimates by 10 percent/12 percent/11 percent for FY23/FY24/FY25 and lower the PE multiple to 22x from 24x

Considering the near-term business headwinds, it expects a 22 percent 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, it expect a 17 percent earnings CAGR over FY23-25.

The 58 percent fall in the stock price in the past one year already factors in the deterioration in the business outlook.

Nirmal Bang

The brokerage has downgraded the stock to ‘accumulate’ rating with a new target price of Rs 1,472.

Gland Pharma’s third quarter results missed the research house and consensus estimates mainly due to persistent supply chain constrains and slowdown in demand.

As per the management, these issues are likely to affect the near-term performance.

Apart from these, increased competition is also likely to affect growth as the company is ready to sacrifice growth for margins. Nirmal Bang turned cautious due to persistent supply chain issues, inventory rationalisation at clients’ level and increased competition.

Bernstein

The research firm has kept the ‘outperform’ rating and cut the target price to Rs 2,036 per share as the Q3 earnings were a miss, while management is cautiously optimistic about FY24.

The revenue impacted by ongoing supply issues and inventory correction at partners. Also, lower off-take of new launches led to contraction in revenue. However, the gross margin is improved.

The management believes profit share is sustainable & margin levels can be maintained, reported CNBC-TV18.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Moneycontrol News
first published: Jan 24, 2023 09:07 am

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