Gland Pharma shares crash 24% in just 3 sessions. What is triggering the big selloff?
1 min read . Updated: 31 Oct 2022, 01:00 PM IST
Premium- Gland Pharma shares are down more than 55% in 2022 (YTD) so far
Shares of Gland Pharma Ltd plunged another over 7% to hit a new low of ₹1,738 apiece on the BSE in Monday's deals. The pharma stock has been under pressure in the past few days after reporting weak set of numbers and has declined more than 24% in just last three sessions. FIIs have also decreased their holdings in the company in the September 2022 quarter.
The company reported a 20% decline in consolidated net profit at ₹241 crore for the second quarter ended September (Q2 FY23), on lower sales and higher expenses. Meanwhile, its revenue and margin also reported a dip from the year-ago quarter.
“Gland Pharma reported weak set of results in Q2FY23 with consolidated revenue declining due to weak performance in geographies such as US, India and RoW. However, the company’s gross margins decreased due to one-time inventory write-off in Biosimilar CDMO as per customer requirement," highlighted Axis Securities in a note.
Gland Pharma said revenue from its core markets of US, Europe, Canada and Australia grew by 3%, however, India revenue was down 42% while the same for the 'rest of the world' market was also down 3%.
"Gland Pharma 2QFY23 sales was inline with our estimates but EBITDA/PAT was 13% below. EBITDA margins were depressed on lower gross margin in RoW market, continued high freight costs, increase in employee expense and one-offs. In our view, supply chain challenges will continue to pose growth and margin headwinds in near term with no clarity of resolution," said global brokerage Jefferies.
“Gland Pharma’s 2QFY23 results were a mixed bag; while revenue was better than estimate mainly due to a sharp recovery in RoW revenue, margins were lower than our and consensus estimates. The management has also withdrawn FY23 guidance mainly due to cost inflation. The management expects cost inflation to continue to affect near term margins," said analysts at Nirmal Bang.
Gland Pharma shares are down more than 55% in 2022 (YTD) so far as compared to about 3% rise benchmark BSE Sensex. Gland Pharma Limited is a leading generic injectable manufacturer.
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