Gland Pharma share price soars 20% to hit upper circuit on Q1 results; what should you do with the stock?

livemint.com:

₹194 crore for Q1FY24. In the same quarter last year, the company's net profit was ₹229.2 crore. Gland Pharma's share price opened at ₹1,480 on BSE as compared to the previous close of ₹1,343.85.

The Gland Pharma shares further rose 20 per cent to hit their upper price band of ₹1,612.60 on BSE. Shares of Gland Pharma have performed poorly in the last one year, falling almost 31 per cent while the equity benchmark Sensex has gained over 12 per cent in the same period. Brokerage firms highlighted Gland Pharma reported better-than-expected Q1 numbers as they appear optimistic about the company's growth prospects.

Brokerage firm Motilal Oswal Financial Services gave a buy call on the stock with a target price of ₹1,560, citing Gland Pharma posted better-than-expected Q1FY24 performance. "After a lacklustre Q4FY23, Gland Pharma has exhibited an improvement in business from core markets as well as stability in India and ROW (rest of the world) businesses. The overall performance has improved to some extent due to a higher profit share component as well for the quarter," Motilal said.

The brokerage firm has raised its earnings estimates by 8.5 per cent and 5 per cent for FY24 and FY25 factoring in a faster revival of the lost business by adding new customers, price stability in the base portfolio, and an increase in milestone income. "We value Gland Pharma at 23 times 12-month forward earnings to arrive at our target price of ₹1,560. Gland Pharma remains on track to not only revive the base business but also to (a) increase its offerings in newer markets like China, (b) build a niche pipeline for regulated markets, and (c) enhance the scope of synergy from the Cenexi acquisition," said Motilal Oswal.