Gland Pharma Q1 Review – India, Rest Of World Hurt Earnings: Motilal Oswal

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Gland Pharma Ltd. delivered weak Q1 FY23 result due to multiple headwinds such as supply constraints of certain ancillary materials, plant modification-led lower production and reduced scope of business for certain products in the Indian market.

While the syringe-related hurdle is addressed, Gland Pharma is working towards resolving other ancillary materials’ availability.

We cut our earnings per share estimates by 14%/16% for FY23/FY24 to factor in:

  1. prolonged supply chain-related issues,

  2. slowdown in India business,

  3. and higher opex.

There are operational hurdles over the near term. However, given the product pipeline of complex injectables, consistent compliance track record, biologics-led additional growth lever and surplus cash for any inorganic opportunity, we believe Gland Pharma’s business model remains intact for better growth prospects over the next three years.

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