Gland Pharma Q1 Results: Profit Falls 35%, Misses Estimates

Gland Pharma Ltd.'s first-quarter profit declined, missing forecasts.

Net profit of the Hyderabad-based generic injectable manufacturer fell 35% year-on-year to Rs 229 crore in the three months through June, according to its exchange filing. That compares with the Rs 278-crore consensus estimate of analysts tracked by Bloomberg.

Sequentially, profits fell 20%.

"Continued supply disruption, cost escalation and the company's decision to shut down two of its manufacturing lines for productivity improvement have affected the business for the quarter," said the company in its filing.

Gland Pharma Q1 Highlights (YoY)

• Revenue fell 26% to Rs 857 crore, against the estimated Rs 1,129 crore.

• Operating profit was down 38% to Rs 270 crore, compared with the Rs 368-crore forecast.

• Operating margin stood at 31.5% against 37.8% a year ago and 32.6% estimate.

Srinivas Sadu, managing director and chief executive officer of Gland Pharma said in the filing, "While market demand for our products remained strong, continuing supply disruptions in the midst of challenging macro environment has impacted our growth for the first quarter of fiscal 2023."

"We ensured timely new product launches which is key to our sustainable business growth."

Other Highlights (YoY)

• Core markets of US, Europe, Canada, and Australia accounted for 82% of revenue during Q1FY23. They reported a de-growth of 6% over June quarter last year.

• India sales accounted for 6% of revenue and witnessed a de-growth of 72%.

• Rest of world markets' revenue declined 55% contributing of 12% of total revenue.

• The drugmaker's research and development expense was 4.8% of the revenue at Rs 41 crore and its total capex outlay was Rs 41.4 crore during the quarter.

• As of June, the company had a cash balance of Rs 3,785 crore.

Shares of Gland Pharma closed 1.23% higher before the results were announced compared with a 1.15% rise in the benchmark Sensex.