Core markets business drive earnings

Company
11 Mar 2024
5 Min read 
  • Gland Pharma reported better-than-expected performance in 3QFY24, driven by robust traction in core markets.
  •  However, there was a decline in India sales and inferior performance in ROW markets.
  •  FY24 earnings estimates have been cut by 5% due to a gradual improvement in Cenexi's profitability and a subdued sales outlook for the India business.
  •  The company is implementing efforts to strengthen its base business in core markets and enhance sales prospects and profitability.
  •  Expect a 20% earnings CAGR over FY24-26 and reiterate a BUY rating.
  •  Revenue and core market sales are expected to grow at an 11% CAGR over FY24-26.
  •  EBITDA margin is expected to expand by 170bp over FY24-26.
  •  EPS is expected to have a 20% CAGR over FY24-26.
  •  Valuation multiples are at 37.7x P/E and 24.2x EV/EBITDA.
  •  The company has a strong order book and is exploring new geographies for expansion.
  •  Cash conversion cycle has improved, and the company has filed multiple ANDAs and received approvals for new products.
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