Gland Pharma Ltd. delivered a strong June quarter, with a sharp rise in profit and margins prompting Jefferies to upgrade the stock to Buy and more than double its target price. Goldman Sachs also raised its target, although it retained a Sell rating, pointing to valuation concerns.
Gland Pharma Q1 Result Highlights (YoY)
- Net Profit rises 47% at Rs 317 crore versus Rs 216 crore.
- Revenue up 19.6% at Rs 1,800 crore versus Rs 1,506 crore.
- EBITDA rises 32.8% at Rs 489 crore versus Rs 368 crore.
- EBITDA Margin up 280 Bps at 27.2% versus 24.4%.
Jefferies upgraded Gland Pharma to Buy from Hold and raised its target price to Rs 3,350 from Rs 2,080, saying the company's key challenges are "largely behind" it. The brokerage highlighted 32% year-on-year growth in the US market and said management now sees FY27 growth potentially reaching 15% in constant currency, compared with its earlier guidance of 12-13%.
Goldman Sachs, meanwhile, maintained its Sell rating but raised its target price to Rs 2,125 from Rs 1,875. It called the margin performance healthy and said the Cenexi turnaround was progressing, although it remains at an early stage. Goldman raised its FY27-29 earnings-per-share estimates by 8-10% to account for the Q1 beat and revised management outlook, but said the stock's valuation keeps it cautious.
ALSO READ: Gland Pharma Q1 Results: Profit Spikes 47% As Margins Expand; Revenue Hits Rs 1,800 Crore
Brokerages on Gland Pharma
Goldman Sachs
- Maintain Sell; Hike target price to Rs 2,125 from Rs 1,875.
- Q1 performance was above expectations, with healthy margin performance.
- Cenexi's turnaround is progressing, although it remains at an early stage.
- Raises FY27-29 EPS estimates by 8-10% to factor in the Q1 beat and revised management guidance and business outlook.
- Maintains a Sell rating on valuation concerns.
Jefferies
- Upgrade to Buy from Hold; Hike target price to Rs 3,350 from Rs 2,080.
- Believes key challenges for Gland Pharma are largely behind it.
- Q1 delivered a strong beat, driven by 32% YoY growth in the key US market.
- Management indicated FY27 growth could reach 15% in constant currency, compared with the earlier guidance of 12-13%.
- The company signed a major CDMO contract and in-licensed a differentiated product with a large total addressable market.
- Key growth drivers include Cenexi reaching breakeven, new contract wins and expansion into complex products.
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