Home >Markets >Mark To Market >Gland Pharma's prospects remain equally firm as stock rises on strong Q4 result

Gland Pharma Ltd, the specialized injectables manufacturer remains in limelight with the approval for production of Sputnik vaccine for covid. It also posted a strong Q4 performance.

The company’s revenue from operations during the quarter ended 31 March grew by 40% year-on-year (y-o-y). The company derives the majority of its revenues from core markets as the US, Europe, Canada and Australia (68% contribution to overall revenues in FY21). The sales from core markets grew healthy 29% y-o-y in Q4. For the year, the core market sales marked a 22% growth, supported by new launches and volume growth in the existing portfolio as well as expanded capacity.

The domestic sales of the company surged 15% y-o-y. The company said that it has ramped up Remdesivir supply and maintained a sufficient supply of Enoxaparin to support the requirement of covid patients.

The rest of the world market are showing phenomenal growth (196% during Q4). This is being aided by new partnerships and increased penetration geographically. The company said it has entered new markets like Singapore, Israel, Saudi Arabia, and CIS countries.

The company’s strong Q4 revenue growth of 40% was complimented well by Ebitda growth of 31% y-o-y. The margins at 40% were slightly lower than 42% in the year-ago quarter. This was primarily due to higher R&D expenses. The company’s net profit grew 34% y-o-y.

The forward prospects too remain strong looking at strong pipeline of products. About 50 abbreviated new drug applications (ANDA) are pending approval from launch from the US Food and Drug Administration.

Besides, the company is expanding its sterile injectable facility located in Hyderabad. It is also enhancing its production capacity for active pharmaceutical ingredients (APIs) in Vizag and adding capacity in its oncology facility to take care of the planned launches in forthcoming years. Additionally, the company will be investing in the drug substance and biologics facility for creating robust infrastructure in vaccine and bio-similar space.

The company already has been identified as one of the manufacturers for vaccine having signed an agreement with Russian Direct Investment Fund to manufacture 250 million doses of Sputnik. The contract will not only drive the company’s manufacturing abilities to meet bioproduct orders, but expand its capabilities and allow it to add new customers in the bioproducts space.

Analysts believe Gland will put up or acquire a BIO-API plant and utilize the current injectable capacity in Pashamylaram to do the fill-finish for Sputnik vaccine. Amey Chalke at Haitong Securities India Pvt. Ltd in his note said that post this contract (Sputnik) Gland can utilize this capacity to manufacture biosimilars for its parent’s subsidiaries. Chalke added additional option value of 664/share for the company’s bio-pharma foray.

Meanwhile, core market performance that remains strong is to be led further by rising market share in Enoxaparin in the US and higher sales of covid related products. Analysts’ data suggests that Gland has increased its market share to 19% in FY21 versus 6% last year. The market share gains in other products, new launches and capacity expansions all are looked at as earnings drivers for the company moving forward.

Not surprising, the stock gained more than 9% in morning trades on Tuesday scaling fresh highs.

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