Gland Pharma’s stock saw a drop of over 2% in morning trade after the company released its Q3 FY25 results, reporting a 6.7% year-on-year (YoY) rise in net profit. For the third quarter ending December 31, 2024, the company posted a net profit of ₹204.7 crore, compared to ₹191.9 crore in Q3 FY24.
However, despite the profit growth, Gland Pharma faced a decline in revenue from operations. The company reported a 10.4% fall, generating ₹1,384 crore in revenue, down from ₹1,545.2 crore a year ago. This drop in revenue has raised concerns among investors, leading to the stock’s decline.
On a positive note, Gland Pharma’s operating performance showed resilience with a slight increase in EBITDA. The company’s EBITDA grew by 1% to ₹360 crore, compared to ₹356.4 crore in the same quarter of the previous year. The EBITDA margin improved to 26%, up from 23.1% in Q3 FY24, highlighting better operational efficiency.
In the meantime, Jefferies has downgraded Gland Pharma’s target price to Rs 1350 while maintaining an ‘Underperform’ rating, following a disappointing quarterly performance. The company saw weak revenue growth in its base business and continued struggles with its recently acquired Cenexi business. Management now expects recovery in Q4 for the base business, but the Cenexi acquisition’s breakeven timeline has been delayed by another year.
Jefferies raised concerns about execution issues and highlighted the absence of near-term growth catalysts. Consequently, the brokerage reduced its FY25-27 EPS estimates by 1-4%, anticipating a slower recovery from the Cenexi acquisition. Unless Gland Pharma shows a significant improvement in operational execution, the stock is unlikely to experience substantial upside.
Gland Pharma shares opened at ₹1,510.00 today, reaching a high of ₹1,518.95 and a low of ₹1,451.00. The stock has seen significant movement over the past year, with its 52-week high at ₹2,220.95 and its 52-week low at ₹1,417.05.
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