Gland Pharma Ltd. shares surged 16.22% to hit a fresh 52-week high of ₹2,170 on Monday, May 18, marking the stock's biggest single-day gain since August 8, 2023. According to latest reports, the rally was driven by strong fourth quarter earnings that exceeded analyst expectations across all key metrics. Kotak Institutional Equities upgraded its rating on the stock to 'add' from 'reduce' and raised the price target to ₹2,075 apiece from ₹1,770 apiece, representing an 11.06% upside from the previous close. The stock has already crossed Kotak's revised price target after Monday's surge.
The company delivered impressive fourth quarter results with net profit increasing by 96.6% year-on-year to ₹186.5 crore from ₹251 crore last year, while revenue grew by 22% to ₹1,743 crore. As reported by multiple brokerages, EBITDA increased by 48% to ₹513 crore with margins expanding significantly to 29.4% for the quarter. Elara Capital noted that PAT was 32% ahead of their estimates, helped by higher other income, while ICICI Securities highlighted that base business revenue grew 22.4% YoY with EBITDA margin zooming up 193bps YoY to a record 40.2%. The strong performance was aided by robust US base business, operating leverage, and favorable forex movements.
According to the earnings report, Gland Pharma's US business grew by 24% to ₹980.7 crore from ₹791.8 crore last year, while the EU business expanded by 36% to ₹381.4 crore from ₹280.1 crore in the fourth quarter. The company's India business saw topline growth of ₹67 crore from ₹52.5 crore, implying a 28% growth from the previous year. The CDMO segment proved to be a major growth engine, contributing 25% of total revenues and growing 65% year-on-year. The Europe segment witnessed a healthy scale-up in inactivated vaccine and sterile ophthalmic gel, driving revenue for the quarter. Elara Capital noted that the regulated markets business benefited from new complex product launches and new contracts in old products.
As reported by multiple brokerages, the company has guided for growth between 12-13% in constant currency terms for FY27, improving to 15% in FY28 and accelerating to 19-20% thereafter. Elara Capital estimates a strong 22% EPS CAGR over FY26-29 for Gland Pharma, driven by new launches and operating leverages. Motilal Oswal Financial Services raised their earnings estimate by 8-10% for FY27/FY28, factoring in healthy pace of product launches in core markets and improvement in profitability of the Cenexi business. The company now has eight customers for GLP-1 and its fill-finish capacity has scaled up to 140 million units. ICICI Securities expects a 19% earnings CAGR over FY26-28 on the back of a complex product pipeline comprising injectables.
According to latest market data, the stock has risen 133% over the last three years and gained nearly 50% in the last one year, demonstrating strong long-term momentum. The company also recommended a final dividend of ₹20 per share, as reported by the_smart_investor. The brokerage noted that with most approvals in place amid near-term patent expiries and commencement of new CDMO contracts, the company's earnings visibility has improved. Elara Capital maintains a 'buy' rating with a target price of ₹2,306, while Motilal Oswal has a 'buy' tag with a target price of ₹2,300. ICICI Securities has a 'buy' rating with a target price of ₹2,365. The company announced a final dividend of ₹20 per share and analysts estimate the GLP 1 opportunity to be an add-on for the firm, with the company's margin guidance excluding Cenexi at 33-35%, which analysts consider conservative.
