Gland Pharma shares gain most in nearly three years after Q4 results, brokerage upgrade

Shares of Gland Pharma Ltd. gained over 14% on Monday, May 18, to hit a fresh 52-week high, as they reacted to their fourth quarter earnings and a brokerage upgrade.

This is the stock's biggest single day gain since August 8, 2023, when it had risen 20%.

For the March quarter Gland Pharma's net profit increased by 86.2% to ₹467.59 crore from ₹251 crore last year, while its revenue increased by 22.3% to ₹1,742.79 crore.

Earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 47.6% to ₹513.02 crore from ₹348 crore in the previous year, while margins expanded to 29.4% from 24.4% in the year-ago period.

Gland Pharma's US business saw growth of 24% to ₹980.7 crore from ₹791.8 crore last year. Meanwhile, its EU business grew by 36% to ₹381.4 crore from ₹280.1 crore in the fourth quarter last year.

Gland Pharma's India business saw a topline ₹67 crore from ₹52.5 crore last year, implying a growth of 28% from last year.

Its Cenexi arm was EBITDA positive despite lower topline on a sequential basis.

The company has guided for growth to range between 12% to 13% in financial year 2027.

Excluding Cenexi, Gland Pharma's margin guidance is between 33% - 35%, which is a bit conservative as per analysts.

Analysts estimate the GLP 1 opportunity to be an add-on for the firm.

Kotak Institutional Equities Upgrades

The brokerage has upgraded its rating on the stock to "add" from its earlier rating of "reduce" and also raised its price target to ₹2,075 apiece from the previous ₹1,770 apiece.

Shares have already crossed Kotak's revised price target after Monday's surge.

The brokerage said Gland Pharma reported a strong fourth quarter, led by robust US base business, aided by operating leverage and favourable forex.

Gland Pharma is guiding for 12%-13% growth in FY27, improving to 15% in FY28 and accelerating to 19-20% thereafter, implying a robust 15% CAGR (excluding GLP-1) over the next four years.

It added that with most approvals in place amid near-term patent expiries and commencement of new CDMO contracts, the company's earnings visibility has improved.

Kotak Institutional Equities said that driven by new launches and operating leverages, it bakes in a strong 22% estimated earnings per share (EPS) CAGR over FY26-29 for Gland Pharma.

Of the 18 analysts who have coverage on Gland Pharma, 13 have a "buy" rating, two have a "hold" rating and three have a "sell" rating.

Shares of Gland Pharma increased 14.3% to hit a fresh 52-week high of ₹2,135.9 apiece on Monday. The stock was up 12.5% at ₹2,100.9 apiece. It has risen 22.6% this year, so far.

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