Gland Pharma shares tank over 52% in 2022. Is the valuation now ‘attractive’?
Generic injectables maker Gland Pharma Ltd on Tuesday said it will buy French pharmaceutical firm Cenexi for 120 million euros (approximately ₹1,015 crore) as it looks to expand its presence in the European markets.
Gland Pharma entered into a Put agreement to acquire Cenexi group, thereby enhancing its CDMO offerings in the Europe market. The acquisition would also provide the company with the technical know-how in sterile forms, including ophthalmic gel, needleless injectors, and hormones, as per domestic brokerage and research firm Motilal Oswal.
Also, the sharp correction over the past six months has made valuation attractive at 21x/18x FY24/FY25 earnings, respectively. Given the gradual improvement in the core business, the brokerage house has reiterated its Buy rating on Gland Pharma shares with a target price of ₹2,470 apiece. The pharma stock is down more than 52% in 2022 (YTD) so far.
The company’s management intends to increase the profitability of Cenexi by improving operational efficiency at the Fontenay site, accelerating technology transfers, shifting some of the products to the GLAND site from Cenexi, and adding capacities at its existing Cenexi sites.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.