Gland Pharma Q3 Results Review - Motilal Oswal Reiterates 'Buy' On New Launches, Higher Milestone Income

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Motilal Oswal Report

Gland Pharma Ltd. delivered a better-than-expected operating performance for the quarter. While revenue came in line, product mix and a higher share of milestone income led to better-than-expected margins in the base business. Cenexi's performance was adversely affected by a surprise inspection of French health authorities and a lyophilizer breakdown.

We cut our earnings estimate by 4%/3%/2% for FY25/FY26/FY27 to factor in:

1. the delay in achieving Ebitda break-even in Cenexi operations, and

2. a reduced off-take in the India segment.

We value Gland Pharma at 28x 12 months (versus 30 times earlier) forward earnings to arrive at our target price of Rs 1,840. The reduction in multiple is to factor in slower execution in core business as well as Cenexi.

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