22 Jul , 2021 By : Kanchan Joshi
Pharmaceutical company Gland Pharma shares surged nearly 7% in Thursday's early deals at Rs4,060 per share on the BSE after the company reported a strong quarter, beating analysts' expectations. The shares have surged nearly 120% since its listing on November 20, 2020. This year, the stock is up over 70% (year-to-date).
The drug firm reported a consolidated net profit of Rs351 crore for the quarter ended June, up 11.8% from Rs313.6 crore year-on-year (YoY) on account of robust sales in all markets. Its revenue from operations stood at Rs1,154 crore as against Rs884 crore for the same period a year ago. The company's key markets - US, Canada, Europe, and Australia - registered a growth of 16% and accounted for 61% of revenue during the first quarter.
Domestic brokerage Motilal Oswal has maintained its Buy rating on the stock with target price of Rs4,460 apiece. ''Gland’s Q1FY22 performance was ahead of our expectation, led by robust revenue growth across all geographies. It is progressing well on scaling up manufacturing of the COVID-19 vaccine. It is concurrently developing products/undertaking capex related to complex product as well as enhancing its geographical diversification,'' the note said.
It remains positive on the stock on the back of continued growth momentum in core markets, increasing reach and expanding product portfolio for the RoW segment, product pipeline build-up for the Chinese market, consistent compliance, and an adequate war chest to tap inorganic opportunities.
Those at Yes Securities have revised the target price upwards to Rs4,500 from Rs3,400 as the brokerage is confident of Gland's sustained revenue momentum beyond FY23 which should take care of margin trajectory and asset turn efficiency to sustain ROCE.
"In spite of the challenges from the second wave of COVID in the country, in terms of manpower availability and supply chain bottlenecks, Gland Pharma has managed to deliver strong quarterly results," Gland Pharma Managing Director and Chief Executive Officer Srinivas Sadu said.
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