Gland Pharma Q2 Results: Profit Falls 16%, Meets Estimates

Gland Pharma Ltd.'s consolidated net profit decreased 16% in the second quarter of fiscal 2025, meeting analysts' estimates.

The company posted a net profit of Rs 163.53 crore in the quarter-ended Sept. 30, 2024, as compared with Rs 194.08 crore in the year-ago period, according to an exchange filing on Monday. Analysts tracked by Bloomberg had estimated a profit of Rs 162.9 crore.

The cost of raw material for the September quarter was 39.2% of sales versus 37.9% of sales last year which led to Ebitda margin of 21.1% versus 24% last year. Company's overall Ebitda margin was affected by Cenexi.

Company's base business (excluding Cenexi) revenue grew 5% year-over-year to INR 10,65.9 crore. Base business (excluding Cenexi) Ebitda increased 5% year-over-year to INR 3,64.5 crore and base business (excluding Cenexi) Ebitda margin was 34%, similar to the year-ago period.

Gland Pharma Q2 FY25 Result Highlights (Consolidated, YoY)

• Revenue up 2.4% to Rs 1,405.83 crore versus Rs 1,373.42 crore (Bloomberg estimate: Rs 1,421.6 crore).

• Ebitda down 8% to Rs 297.06 crore versus Rs 324.08 crore (Bloomberg estimate: Rs 284.7crore).

• Margin at 21.1% versus 23.6% (Bloomberg estimate: 20%).

• Net profit down 16% to Rs 163.53 crore versus Rs 194.08 crore (Bloomberg estimate: Rs 162.9 crore).

Business Highlights (Gland)

• R&D expenses at Rs 49.3 crore (4.6% of revenue).

• Company filed 7 ANDAs filed and 8 ANDAs have been approved in Q2FY25. Total Capex incurred during the quarter ended September 30th, 2024, was Rs 1,03.7 crore.

• US Market: Four molecules, including Cetrorelix Acetate, Ephedrine Sulfate, Tranexamic Acid, and Diazepam, were launched in the US market.

• China: Four of the nine products in the plan for China markets are currently under development, and five have received approvals.

• Complex Injectables: Nine filings completed in a targeted portfolio of 19 products. Six of these complex products have already been approved (6 launched), with three more expected to secure approval in due course. These products target an IQVIA market opportunity of $7.3 billion, reflecting the significant potential of this segment to drive future growth.

• Biologics: During the quarter, Gland entered into a binding term sheet with Dr. Reddy's Laboratories (DRL) to establish strategic cooperation for the biologics CDMO business. This partnership will leverage our state-of-the-art biologics manufacturing facility at Genome Valley in Hyderabad.

Business Highlights (Cenexi)

Fontenay Site (Paris, France):

Company's new high-capacity ampoule line is on track for commercial production in January 2025. This project has stayed within budget and schedule and will significantly boost company's manufacturing capacity, customer service, and revenue.

Hérouville Site (Normandy, France):

Good progress is being made on validation batches for company's new inactivated vaccine and ophthalmic gel projects, paving the way for commercial production before the end of the year. While the site is currently operating at lower volumes, company is encouraged by the growing interest from new partners for the capacity.

Braine-l'Alleud Site (Belgium):

Temporary setback caused by a lyophilizer breakdown at the site. company is currently operating at full capacity with its remaining lyophilizers. The issue will be fully resolved during the quarter, and a new backup unit will be installed in the first half of 2025 to prevent future disruptions and increase in capacity.

Outlook For Cenexi

Despite these near-term headwinds, company continue to strive to achieve our short-term outlook: a positive Ebitda for Q4 of FY25. The company maintains their goal of a positive Ebitda for the next fiscal year, driven by an increase in revenue above the €200 million threshold.

Shares of Gland Pharma closed 2.15% lower at Rs 1,610.90 apiece on the NSE, as compared with a 1.27% decline in the benchmark Nifty 50.

It has risen 6.65% in the last 12 months and declined 16.30% on a year-to-date basis.