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Gland Pharma Q3 Results: Profit Falls, Misses Estimates

The net profit of the Hyderabad-based generic injectable manufacturer fell 15% year-on-year to Rs 232 crore in Q3 FY23.

<div class="paragraphs"><p>Source: Unsplash</p></div>
Source: Unsplash

Gland Pharma Ltd.’s third-quarter profit fell, missing forecasts.

The net profit of the Hyderabad-based generic injectable manufacturer fell 15% year-on-year to Rs 232 crore in the three months through December, according to its exchange filing. That compares with the Rs 269 crore consensus estimate made by analysts tracked by Bloomberg.

Sequentially, the profit fell 4%.

Gland Pharma Q3 Highlights (YoY)

  • Revenue fell 12% to Rs 938 crore, against the estimated Rs 1,063 crore.

  • Operating profit was down 17% to Rs 290 crore, compared with the Rs 351-crore forecast.

  • Operating margin stood at 30.9%, compared with 32.8% a year ago and a 31.5% estimate.

"Challenging business environment, ongoing supply chain disruptions leading to production delays continue to impact our performance," said Srinivas Sadu, managing director and chief executive officer of Gland Pharma, in the exchange filing.

The company, he said, has received an Inspection Report from the U.S. FDA after the last audit at our Dundigal facility. "Our continued focus on product quality and compliance differentiates us and provide confidence to our partners for long term association."

Other Highlights (YoY)

  • Core markets in the U.S., Europe, Canada, Australia, and New Zealand accounted for 70% of revenue during Q3 FY23. They reported a decline of 11% over the December quarter last year.

  • India sales, accounting for 9% of the revenue, contracted by 32%. The company has witnessed sequential recovery in its India business due to the normalisation of its insulin production line.

  • The rest of the world's markets' revenue declined 4%, contributing 21% of total revenue.

  • The drugmaker's research and development expense was 5.5% of the revenue at Rs 51 crore, and its total capex outlay was Rs 43 crore during the quarter.

During Q3 FY23, the company filed eight abbreviated new drug applications and received four ANDA approvals. It is adding new capabilities of Combi-line for Microsphere, additional Bag line and lyos for the Penem block in Pashamylaram facility in Hyderabad, and will be earmarking capital for further building on its biosimilar CDMO facility, according to the exchange filing.

"Our new production lines in our sterile facility in Pashamylaram will support our product portfolio of complex and differentiated delivery formats," Sadu said.

The signing of the share purchase agreement for the proposed acquisition of Cenexi was their first acquisition overseas and that it was in line with Gland’s long-term growth objectives, he said. It will enable Gland to increase its presence and expand its product and service offerings in Europe.

Gland Pharma's revenue in the first nine months ended December declined 14% over a year earlier. This was due to “significant business impact in first quarter of current financial year because of non-availability and long lead times for several processing and primary materials, softer offtake of few of our key products in the US and higher base of last year due to covid-related products sale."

Shares of Gland Pharma closed 0.67% lower on Monday before the results, against a 0.53% rise in the benchmark Sensex.