Gland Pharma Q4 results: Share price falls 20% to hit 52-week low after dismal Q4

The company’s net profit in Q4FY23 plunged 72% to ₹78.68 crore from ₹285.90 crore reported in the year-ago quarter. The net profit was also impacted by one- off expense worth ₹56.46 crore towards an impairment loss. 

The drugmaker’s revenue from operations declined 29% YoY to ₹785 crore during Q4. Gland Pharma attributed this decline to a shutdown in the production line during the quarter at its Pashamylaram (Telangana) Penems manufacturing facility due to line upgradation. 

Additionally, a softer off-take in the Rest of the World (RoW) market due to tender seasonality was also attributed as a reason for this sequential decline in the topline.

RoW markets, which accounted for 22% of Q4FY23 revenues, saw revenues decline 12% sequentially and 10% year-on-year. The company’s business from the domestic B2C division also reduced during the year as compared to the previous year. 

Read here: Gland Pharma Q4 net profit declines 72% year-on-year

Brokerage firm Motilal Oswal Financial Services cut its earnings estimates for the company by 36%/22% for FY24E/FY25E factoring in reduction in scope of business from a bankrupt customer, gradual revival in business due to shift of business by another customer to alternate supplier, and reduced share of profit due to higher competition in existing product portfolio. 

“While the multiple headwinds on revenue and operational cost have hit its FY23 performance, we expect a slow recovery over the next 12-15 months aided by new launches in China/other regulated markets, newer contracts in CDMO segment and inventory rationalization of existing products,” Motilal Oswal said.

The brokerage retained a Buy rating on the stock with a target price of ₹1,460 per share.

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