Gland Pharma shares fall 5% to November 2023 lows after downgrades, target cuts

Shares of Gland Pharma Ltd. were trading with losses of 5% on Tuesday, February 4. The decline was seen after the stock received downgrades and price target cuts following another disappointing quarter in December. The stock neared its 52-week low and recorded its biggest drop since November 2023.

Analysts tracking Gland Pharma expect a potential upside of 26.5% from Monday’s closing levels.

Global brokerage firm Jefferies maintained its ‘Underperform’ rating on Gland Pharma while lowering the price target to ₹1,350 per share.

Jefferies said the company reported another disappointing quarter with weak revenue growth in its base business. Additionally, Gland Pharma faced further drag from its acquired Cenexi business.The company expects its base business to recover in Q4, but Cenexi’s breakeven timeline has been pushed out by a year.

“Execution remains weak, and the stock lacks near-term catalysts,” Jefferies said.

The brokerage also lowered its FY25-27 earnings per share estimates by 1-4%, factoring in a slower-than-expected Cenexi recovery
Meanwhile, Incred downgraded the stock’s rating to ‘Reduce’ from ‘Hold’ earlier and cut its target price to ₹1,313 from ₹1,768.Incred said that Q3FY25 revenue missed expectations, but EBITDA beat the brokerage’s estimate by 8%, driven by a sharp 500-basis-point sequential increase in base business margin.

Cenexi’s breakeven timeline has been pushed to Q3FY26F (from Q4FY25F earlier) due to regulatory observations at the Fontenay plant and a breakdown at the Belgium plant.

Kotak Institutional Equities has maintained a cautious outlook on Gland Pharma.

Amid continued operational challenges, Kotak reiterated its ‘Reduce’ rating, lowering the price target to ₹1,525 from ₹1,625.

“As we incorporate lower sales and EBITDA margin assumptions for Cenexi, along with the base business, we have revised our FY25-27E earnings per share estimates downward by 1-6%,” Kotak said.

Due to persistent delays in resolving Cenexi’s issues and sluggish base business growth, Kotak also lowered its target multiple to 20x from 22x.

Out of the 16 analysts that have coverage on Gland Pharma, eight of them have a ‘Buy’ rating, two say ‘Hold’ and six of them have a ‘Sell’ rating on the stock.

Shares of Gland Pharma Ltd. are currently trading 5.02% lower at ₹1,437.90. The stock is down 20% so far in 2025.