Gland Pharma shares rally 6% as brokerages lift ratings, target prices; here’s why

Gland Pharma shares rally 6% as brokerages elevate rankings, goal costs; this is why

Shares of Gland Pharma climbed as a lot as 6.4% on Wednesday to Rs 2,090.20 on BSE, as a number of brokerages upgraded the inventory and raised goal costs, citing a profitable turnaround of its European unit Cenexi and a pointy growth in working margins within the June quarter.

Jefferies upgraded the inventory to ‘Hold’ from ‘Underperform’ and raised its value goal to Rs 1,950 from Rs 1,350, stating that “Gland Pharma’s earnings have bottomed out” and that “the Cenexi breakeven leads to in-line EBITDA.” Jefferies also famous that while the corporate’s US efficiency was gentle, full-year steerage remained strong, with mid-teens progress anticipated.

Motilal Oswal was more bullish, retaining a ‘Buy’ ranking and elevating its value goal to Rs 2,340, implying a 19% upside from the earlier shut. The brokerage expects a CAGR of 14%/20%/27% in income/EBITDA/PAT over FY25–27 and sees additional margin enchancment within the second half of FY26 as Cenexi’s profitability scales up.

“We raise our earnings estimates by 9%/3% for FY26/FY27, factoring in:

a) scale-up of GLP-1 products in other core markets,
b) faster turnaround of Cenexi, and
Live Eventsc) potential launches in the US/EU,” the brokerage said.

Only Goldman Sachs maintained a bearish view, retaining a ‘Sell’ ranking with a goal value of Rs 1,675. The brokerage acknowledged the 39% year-on-year progress in EBITDA and strong exhibiting from Cenexi, however flagged the underperformance within the US section.

Cenexi turnaround boosts sentiment

Brokerage commentary targeted on the improved profitability of Cenexi, the French CDMO that Gland Pharma acquired in 2023. Jefferies famous that Cenexi achieved EBITDA break-even during the quarter, stating that the “turnaround was led by higher-value tech transfer projects and better utilization across sites.”Cenexi’s gross sales rose 20% year-on-year, serving to elevate Gland Pharma’s consolidated EBITDA margin to 24.4%, an growth of 557 foundation factors, according to each Jefferies and Goldman Sachs. Motilal Oswal highlighted that excluding Cenexi, the margin was even greater at 34.5%.

Management expects sustained optimistic EBITDA from Cenexi and famous that “profitability is expected to further improve from the second half of FY26 onward.”

Also read | Swiggy vs Eternal: Which inventory guarantees better worth supply publish Q1 present?

(Disclaimer: Recommendations, solutions, views and opinions given by the specialists are their very own. These don’t symbolize the views of The Economic Times)

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