This largecap stock falls 15% on weak Q2 results; down 50% YTD

Shares of Gland Pharma declined 15% to hit an all-time low on the Bombay Stock Exchange (BSE) on Thursday after China's Fosun Pharma-backed company reported disappointing earnings for the September quarter (Q2FY23), dented by lower sales and rise in expenses. In contrast, the BSE benchmark Sensex climbed 415 points to 59,960 levels in the first two hours of the trade so far.

The shares of Gland Pharma opened 3.4% lower at ₹2,148.80 on the BSE, against the previous closing price of ₹2,224.20 on the BSE. Extending opening losses, the stock tumbled as much as 14.96% to touch a record low of ₹1,891, weighed down by a surge in selling activities. On the volume front, as many as 0.39 lakh shares changed hands over the counter on the BSE, against the two-week average volume of 0.14 lakh stocks.

With a market capitalisation of ₹31,307 crore, the largcap stock trades 53.4% lower than its 52-week high of ₹4,060 touched on January 6, 2022. The stock has plunged 46% in the past one year, while it lost more than 50% in the calendar year 2022 (year-to-date basis).

In the past six months, Gland Pharma share price has dipped 39%, while it shed 8% in a month. The stock has fallen over 12% in the last five sessions.

According to stock market analysis platform Trendlyne, three analysts have offered long term price targets for Gland Pharma, with an average target of ₹3,590, an upside of 89% from the current market price.

The pharma company, which made its stock debut in November 2020, trades 26% higher than its initial public offering (IPO) price of ₹1,500. Headquartered in Hyderabad, the company made its debut on the domestic indices on November 20, 2020, after successfully raising ₹6,480 crore via public issue.

Q2 net dips 20% on lower sales

Gland Pharma shares were hammered on Thursday after the company reported a 20.14 % decline in consolidated net profit at ₹241.24 crore for the second quarter ended September 30, 2022, compared with ₹302.08 crore in the same period last fiscal. The consolidated revenue from operations fell 3% to ₹1,044.4 crore, as against ₹1,080.47 crore in the year-ago period.

Revenue from India business dropped 42% to ₹72.6 crore, as compared to ₹125.8 crore in the year-ago quarter, while the same for the 'rest of the world' market dipped 3% to ₹224.3 crore, as against ₹232.2 crore in the corresponding period last year. The revenue from its core markets of U.S., Europe, Canada and Australia grew by 3% to ₹747.5 crore in Q2 FY23, versus ₹722.5 crore in the same period last fiscal.

''Although we have seen increased competition in our new products, we remain confident of our launch pipeline that will ensure sustainable growth. We are seeing positive momentum in our biologics/biosimilar CDMO (contract development and manufacturing) business,'' said Srinivas Sadu, the company’s Managing Director & CEO.

Established in 1978 in Hyderabad, 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.