The drugmaker, which announced results for the September 2022 quarter, reported a 20% year-over-year drop in consolidated net profit at Rs 241.24 crore for the quarter as revenue fell and higher costs.
Following the earnings announcement, shares of Gland Pharma fell 15% to Rs 1,891, a new 52-week low, before trading at Rs 1,901 at 12:50 pm. The scenario was settled at Rs 2,224 on Tuesday.
Global brokerage Jefferies downgraded Gland Pharma from the buy with a revised target price of Rs 2,241, due to top near-term growth rates and margin constraints.
The company’s legal filings add that consolidated revenue from operations for the period under review was 1,044.4 crore, compared with 1,080.47 crore in the previous year.
Gland Pharma said revenue from its core markets such as the US, Europe, Canada and Australia rose 3% to Rs 747.5 crore in the second quarter, compared with 722.5 crore respectively in the fiscal year. last.
However, its India sales fell 42% at Rs 72.6 crore, compared with Rs 125.8 in the previous quarter, while the figure was similar for the ‘rest of the world’ market. ‘ also fell 3% at Rs 224.3, as compared to Rs 232.2 crore.
Gland’s sequential revenue recovery was lower than estimated in Q223, while margins fell to new lows, resulting in missed PATs, Kotak Institutions Equities said. The company withdrew its 2023 sales and margin guidance with visibility on timelines low to normal.
“As we continue to face multi-faceted challenges, we expect Gland’s growth and margins to fall to a new normal,” it said, maintaining its ‘bearish’ rating on the stock. The new target price is Rs 1,975 from the previous Rs 2,325.
Another domestic brokerage, Nirmal Bang Institutions Equities, has slashed revenue and EBITDA estimates for the next three due to a near-term slowdown in growth, cost inflation, and volume declines in the US. .
Profit margins are likely to continue to be under pressure in the short term due to cost inflation and negative operating leverage, it added. The stock corrected sharply, covering all short-term concerns, it said, with a buy rating and target price of Rs 2,582.
“We are not positive about the US generics market, we like Gland Pharma because of its presence in the low-competitive injectables segment, the ability to build economies of scale with the partnership model and tight compliance track record,” it added.
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