Gland Pharma Q3 Results Review - Work In Progress On Multiple Issues: Motilal Oswal

Motilal Oswal Report

Gland Pharma Ltd.’s Q3 FY23 performance was below our expectation, affected by lower sales across key markets due to inventory rationalisation by customers and prolonged supply chain issues.

Gland Pharma has signed a share purchase agreement with Cenexi in Jan-23 and is on track for necessary regulatory approvals for the acquisition.  We cut our earnings per share estimates by 10%/12%/11% for FY23/FY24/FY25 and lower the price-to-earnings multiple to 22 times from 24 times to factor in-

1. lower off-take of Enoxaparin,

2. the gestation period on account of getting approval for an alternate supplier of stopper for Heparin,

3. production delays,

4. a reduction in business of low-margin products, and

5. lower pricing of Heparin in India.

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