Gland Pharma shares rally 10% post Q1 results: Highest and lowest target prices

Gland Pharma Ltd shares rallied 10 per cent in Tuesday's trade after the manufacturer of small volume parental solutions delivered better-than-expected financial performance in the June quarter, with 5-9 per cent beat on revenue, Ebitda and PAT. Analysts said the performance was driven by robust growth in the US and EU markets, even as other core markets and ROW saw subdued performance.

Following its Q1 results, Gland Pharma guided for revenue growth of 15-16 per cent YoY in FY27 in constant currency (CC) terms. It aspires to achieve a 20 per cent CAGR from FY28 onward over next four years.
Revenue growth is expected to be driven by the scale-up of recently signed contracts and a higher off-take of base products, supported by better capacity utilization.

"We raise our earnings estimates by 3-4 per cent for FY27/FY28, factoring in: a healthy pace of differentiated product launches in the US and European markets, and currency depreciation tailwinds. We value GLAND at 30 times 12-month forward earnings to arrive at a target of Rs 3,080," MOFSL said.

Following the results, the stock rose 10 per cent to hit a high of Rs 2,929.65 on BSE. The Bloomberg consensus target on the stock stood at Rs 2,672.53, implying a 6.4 per cent potential downside.

Elara Securities said the growth momentum in the US business, that started showing up in the past two-three quarters, sustained in Q1FY27. The regulated markets business benefitted from new complex product launches and new contracts in old products, it said adding that Cenexi remains EBITDA-positive despite posting flat top-line YoY.

"However, guidance of 20 per cent CAGR in the next four years sounds too optimistic, even considering the active momentum of new CDMO opportunities – We stay well short of it in our projections. We raise our core FY27E-FY29E EPS estimates by 5-10 per cent as we build in better margins and faster growth in the CDMO segment," Elara said.

This brokerage felt that after the nearly 40 per cent run up in the Gland Pharma stock price in the past three months, upside is capped. Therefore, Elara downgraded the stock to 'Accumulate' from 'Buy' with a higher target price of Rs 2,956.

Equirus Securities said Gland’s performance has been lackluster over the last four years on account of sharp erosion in injectables, dearth of high value launches and Cenexi’s drag on profitability.

"However, going forward, we expect Ebitda to grow at a 20 per cent CAGR over FY26–29E, backed by a) scale-up of GLP-1, b) Cenexi’s turnaround, c) Collaboration with Neuland sterile API & China partner liposomal product & d) traction in new launches (including gInfuvite). Considering the improvement in earnings growth along with ROIC strengthening by 700bps to 22 per cent, we retain LONG rating with a Sep’27 target of Rs 2,985, set at 30x P/E," Equirus said.

Gland Pharma: Highest and lowest target prices

Goldman Sachs suggested a 'Sell' on the stock with a target of Rs 2,125. Ambit Capital suggested a target of Rs 1,940 on the stock, the lowest on the Street so far. Jefferies' target of Rs 3,350 on Gland Pharma is the highest. Nomura sees the stock at Rs 3,330.

Investec's target for Gland Pharma stands Rs 3,330, ICICI Securities at Rs 2,825, IIFL at Rs 2,435, Nirmal Bang at Rs 2,885, MOFSL at Rs 3,080 and 360 ONE Capital at Rs 2,835.