Gland Pharma Shares have Plunged 80% from Record Highs

Gland Pharma shares plunged 19% to a 52-week low.

In an otherwise firm market, shares of Gland Pharma fell 19% to hit a fresh low of Rs 872.10 in intraday trade on Monday.

In the last two trading days, the stock of this pharmaceutical company has declined 35% after the company reported a weak set of numbers, with profit after tax (PAT) falling 72% to Rs 78.70 crore in the March quarter (Q4FY23). The drug company had posted a PAT of Rs 285.90 crore in the year-ago quarter.

The stock was quoted down 16% at Rs 894.90 at 11:18 am. In contrast, the S&P BSE Sensex gained 0.34% to 61,940.

The stock has plunged 80% from its all-time high of Rs 4,350 hit on August 12, 2021. Its offer price is currently down 42% from its issue price of Rs 1,500 per share. The company went public on November 20, 2020.

On the earnings front, Gland Pharma’s revenue fell 29% year-on-year to Rs 785 crore due to lower sales of key products in developed and domestic markets. In addition, the closure of the production line at the Pashamylaram Penems factory also affected the revenue.

Meanwhile, on the operational front, Ebitda fell 52% year-on-year to Rs 169 crore, with a margin of 21.5%.

Analysts at Nirmal Bang Equities said the company reported its worst Ebitda margin ever, mainly due to negative operating leverage, which was partially offset by a better geographic mix.

In addition, a client of Gland Pharma filed voluntary proceedings under Chapter 11 of the US bankruptcy code.

From supply issues to increased competition, analysts warn that the growing problems facing Gland Pharma will affect its future business growth.

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