Gland pharma shares down 80% from its all-time high: Buy on the dip?
4 min read . Updated: 11 Mar 2023, 08:08 PM IST
Premium- Gland Pharma is a pharmaceutical company having a market cap of ₹19,400.51 Cr recorded on Friday.
Gland Pharma is a pharmaceutical company having a market cap of ₹19,400.51 Cr recorded on Friday. With a worldwide footprint spanning 60 countries, including the United States, Europe, Canada, Australia, India, and other markets, it is one of the largest generic injectables manufacturing firms. A maximum size of up to Rs. 6499 Cr. was raised in the Gland Pharma IPO of 43,196,968 equity shares with a face value of ₹1. The issue was priced at ₹1490 to ₹1500 per share and the initial public offering (IPO) took place between November 9 and November 11, 2020. Friday, November 20, 2020 saw the company's stock listing on the exchanges.
Gland Pharma share price history
On Friday, the shares of Gland Pharma closed on the NSE at ₹1,189.80 apiece level, down by 3.79% from its previous close of ₹1,236.65. The stock recorded a total volume average of 6,04,825 shares compared to the 20-Day average volume of 19,590 shares. The shares have dropped 34.61% to the level of the current market price since its IPO, setting a record low.
The shares have fallen 64.27% over the past year, and it is down 24.50% YTD in 2023. The stock has dropped 49.61% over the past six months, and 12.84% during the past month. The decline over the previous five trading days was 8.37%. At the present market price, the stock is trading 79.83% below its all-time high, which was reached on October 18, 2021, when it hit a record high of ₹5900.00 a piece. The stock touched a 52-week-high of ₹3,559.40 on (21-Apr-2022) and a 52-week-low of ₹1,167.00 on (06-Feb-2023).
Gland Pharma earnings
During Q3FY23, the company recorded a net income of ₹999.80 Cr on a consolidated basis, down by 9.84% from ₹1,108.99 Cr recorded in Q3FY22. The company recorded net expenses of ₹686.33 Cr during the quarter ended December 2022, down by 7.53% YoY from ₹742.25 Cr recorded during the quarter ended December 2021.
Gland Pharma recorded an EBIT of ₹313.47 Cr in Q3FY23 compared to ₹366.75 Cr in Q3FY22 and the company said its net profit stood at ₹231.95 Cr in Q3FY23, down by 15% YoY from ₹273.03 Cr posted in the same quarter of FY22. The EPS of Gland Pharma reached ₹14.08 in Q3FY23 compared to ₹16.62 in Q3FY22.
Should you buy Gland Pharma?
Speaking on the stock price outlook, Rahul Ghose, Founder & CEO–Hedged, an algorithm-powered advisory platform said “The gland pharma stock is currently near its all-time low and the previous support area around INR 1170 level, which is not a strong reason to initiate a buy on it. Production delays in its core markets, large supply chain issues coupled with a below-expectation performance in its recent Q3 quarter are some of the fundamental reasons for the stock has fallen more than 65% from its peak and for the continuation of its fall."
“Technically the stock is not yet a buy and will turn into a but, only after the stock gives two bullish closings above the INR 1280 level. We are also seeing an uptick on the bollinger bands indicator to the upside which may or may not materialize but would be one of the crucial points to watch out for initiating a buy on the stock. The INR 1280 level mentioned is also the 20 day EMA for this stock, which also adds further significance as the stock has never managed to close above its 20 day EMA since January 2022," Rahul Ghose further added.
Sayyam Agarwal, Head of Academics, ANG (Aspire Now Global) said Gland Pharma was established in Hyderabad, India in 1978. It has grown over the years from a contract manufacturer of small volume liquid parenteral products, to one of the largest and fastest growing injectable-focused companies. It has its presence in more than 60 countries, including the United States, Europe, Canada, Australia, India and others.
The share price of the company is falling from August 2021 because of various reasons.
1) During 2020-21 i.e. the covid period, pharma was the leading segment because of the uncertainty and high dependency on injectables and medicine. During this period the pharma sector went into a highly overvalued zone. After the second wave was over, the dependency on the sector reduced to an extent which led to correction in the sector.
2) After the second covid wave since the dependency on the pharma reduced, it also impacted the sales growth of the company. From August 2021, revenue declined as per expectations which led to additional fall in the share.
3) Coming to the current scenario, there is pricing pressure from US generics which pressures the company’s growth, since it is one of the main contributors in the company’s growth.
4) On the technical front, the prices are consistently facing resistance from trendline. It is important for the prices to sustain above the trendline to move up. Also, there is a Bullish divergence in RSI which is indicating the prices to move up. So based on all the news, fundamentals and technicality of the company one can buy above 1340.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.