Gland Pharma's arm Cenexi gets 10 observations from French agency ANSM

Gland Pharma Ltd on Wednesday said its Europe-based subsidiary Cenexi received 10 observations from ANSM (French National Agency for the Safety of Medicines and Health Products). "This is to inform you that the Agence nationale de sécurité du médicament et des produits de santé (ANSM), France, conducted a Good Manufacturing Practices (GMP) inspection of Cenexi's Fontenay Manufacturing Facility (material subsidiary of Gland Pharma Ltd) between December 9 and December 19, 2024," the pharma company stated in a BSE filing.

"The said inspection was concluded, and the Facility received an official notification on December 24, 2024, citing 10 (TEN) observations. Cenexi is committed to working closely with the ANSM to address the Observations and will provide further updates to the exchanges as they become available," it added. Cenexi is a contract manufacturing company acquired by Gland Pharma last year.

On the earnings front, the firm recorded a 16 per cent drop in its September 2024 quarter net profit. The generic injectable-focused company's consolidated net profit slipped to Rs 163.5 crore in Q2 FY25 from Rs 194 crore in the year-ago period. Consolidated revenue, however, rose 2 per cent year-on-year (YoY) to Rs 1,405.8 crore.

Kotak Institutional Equities has upgraded Gland Pharma's stock to 'Reduce' from 'Sell' with a revised target price of Rs 1,625. "On muted expectations, Gland reported an 8 per cent EBITDA beat in Q2 FY25 led by the base business. Cenexi's subdued performance was largely in line with our estimates. We bake in a sales recovery hereon in the core business as well as Cenexi. Even as the progress will be gradual, we believe Gland's earnings have now bottomed out. Also, after a long wait, the company has made tangible progress in biologics CDMO. The stock has corrected 24 per cent in the past three months and has given flat returns in the past one year (versus 50 per cent for Nifty Pharma), which restricts significant downside hereon," the brokerage said last month.

Axis Securities also underscored that Gland Pharma posted better-than-expected Q2 FY25 results. "Gland (Ex-Cenexi) registered a muted revenue growth of 5.1 per cent YoY due to the annual shutdown of planned maintenance, maintaining EBITDA margins of ~34.3 per cent, which is in line with preceding quarters on a YoY basis," it said.

Gland Pharma shares were last seen 0.51 per cent up at Rs 1,775. Technically, the counter traded higher than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but lower than the 100-day, 150-day and 200-day SMAs. The scrip's 14-day relative strength index (RSI) came at 52.96. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 26.59 against a price-to-book (P/B) value of 3.20. Earnings per share (EPS) stood at 66.94 with a return on equity (RoE) of 12.02.