Gland Pharma shares tumble 21% in 4 sessions after Q2 results – Should you Buy/Hold/Sell, brokerages suggest this

Reacting to a weak set of July-September quarter numbers, Gland Pharma's share price has crashed nearly 21 per cent on Tuesday since its earnings announcement on October 26, 2022. The decline in the stock came after the company reported a lower set of numbers with respect to revenue, profit, and margins in Q2.

According to Street, Gland Pharma reported a weak set of results in Q2FY23 with consolidated revenue declining by 3.3 per cent year-on-year (YoY) due to weak performance in geographies such as the US, India and the Rest of World.

It also noted that the profitability is yet to show improvement as supply constraints of certain materials are still to be completely resolved, and there is ongoing opex related to the biologics segment, which is yet to garner revenue.

Motilal Oswal in its review said, the pharma company has exhibited business recovery to some extent sequentially. Further, it continues to put effort towards complex product pipeline buildup and enhance manufacturing capability and capacity. It maintains BUY with a target of Rs 2660 apiece.

While global brokerage firm Nomura said that the valuation multiple has declined over the past year as growth and margin uncertainty have increased. It maintained a Neutral stance with a target of Rs 2,236, expecting the stock to trade close to the current trading multiple with a downside bias.

“Efforts by the company to diversify into complex products and CDMO are critical for long-term growth, but unlikely to have a material impact in terms of earning contributions and investor sentiment in the near term,” the global brokerage firm said.

Similarly, FY23 seems to be flat revenue growth due to increased competition and moderation demand for Gland Pharma, therefore Axis Securities recommend HOLD with a target of Rs 2,100.

On Tuesday, shares of Gland Pharma closed flat with a negative bias to Rs 1784 per share on the NSE. The stock has declined around 52 per cent in the last one year, and nearly 54 per cent year-to-date. The counter on Monday had touched a fresh 52-week low of Rs 1681 apiece on the BSE.