Motilal Oswal Suggests To Buy This Pharma Stock For 19% Upside, In 1 Year, With Rs. 4240 Target Price

Brokerage firm Motilal Oswal in a recent report has recently suggested investors to buy the stocks of Gland Pharma, for a 19% upside, in 1 year. In the post-pandemic time, this pharma stock is also expected to perform well. Covid Vaccine-related growth has potential.

Target Price

The Current Market Price (CMP) of Gland Pharma, is Rs. 3570. Motilal Oswal has estimated a Target Price for the stock at Rs. 4240. The company is expected to offer a 19% upside, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 3570
Target Price	Rs. 4240
1 year return	19.00%

Company performance

Gland Pharma's 3QFY22 revenues grew 24% YoY to Rs. 10.6b. RoW sales grew 88% YoY to Rs. 2b (19% of sales). India sales were up 31% YoY to Rs. 2b. Sales in the core markets (the US, EU, Canada, and Australia) grew 10.5% YoY to Rs. 6.7b (63% of sales). EBITDA was up 32% YoY to Rs. 3.5b. Adj. PAT grew at a higher rate of ~34% YoY to Rs. 2.7b, aided by higher other income. 9MFY22 sales/EBITDA/PAT grew 28%/19%/26% YoY to Rs. 32.9b/Rs.11.6b/Rs.9.3b. The brokerage firm expects a 29% earnings CAGR over FY22-24, led by a sales CAGR of 16% in the core markets, 23% in India, and 43% in ROW - supported by 200bp margin expansion over FY22-24E.

Comments by Motilal Oswal

Motilal Oswal has mentioned, "Gland Pharma delivered a slight miss on 3QFY22 earnings. GLAND is on track to build its product pipeline as well as invest in manufacturing infrastructure in the complex categories of Peptides/Long-acting Injectables/Suspensions/Hormonal Products. We lower our EPS estimate by 5% for FY22/FY23, largely to factor in further delays in the export realization of Sputnik and supply disruption related to Covid. We remain positive on GLAND on the back of volume-led growth in existing molecules, new launches in the complex space, its entry into the Biotech segment through the CDMO route, and sufficient cash on the balance sheet for inorganic growth."

About the company

Established in Hyderabad, India in 1978, Gland Pharma has grown over the years from a contract manufacturer of small volume liquid parenteral products, to become one of the largest and fastest-growing injectable-focused companies, with a global footprint across 60 countries, including the United States, Europe, Canada, Australia, India, and other markets. They operate primarily under a business-to-business (B2B) model. Gland indicated 1QFY23 would be the timeline for the Sputnik commercialization benefit, given the time required for documentation, production, and subsequent sample testing.

(Also read:  Sharekhan Suggests Buying This Stock For 24% Return, Amid Falling Equity Market In India)

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.