Gland Pharma Q3 Results Review - Base Business Performance A Key Monitorable: Nirmal Bang

Nirmal Bang Report

Gland Pharma Ltd.'s Q3 FY24 revenue was largely in line with our estimates, margins were in line with estimates but the net profit was lower than expected due to a higher-than-expected tax outgo.

Q3 FY24 revenue grew by 64.7% YoY while Ebitda margin contracted by 780 bps YoY to 23.1% mainly due to the acquisition of Cenexi. Excluding Cenexi, Q3 FY24 revenue grew by 17% YoY and Ebitda margin was strong at ~34% versus 31% in Q3 FY23.

Price erosion in the base business has stabilised. Customer issues have also nearly been resolved as the company is able to successfully transfer products and is re-launching them for new customers.

Gland Pharma is one of the best plays for the U.S. market due to its strong compliance track record with niche low competition Injectables portfolio and ability to build economies of scale with a partnership model.

Also, the company has improved the cash conversion cycle from 240 days in 9M FY23 to 182 days in 9M FY24. Capex for the quarter stood at Rs 810 million.

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