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A Pharma Stock with 21% Upside to Heal Your Portfolio

Published 18-06-2024, 11:01 am

The pharma space has been doing quite well for the last few sessions with the Nifty Pharma index up 5% to 19,741 this month so far. Companies in this sector are also known for their strong resilience during a falling market and hence this sector is also called a defensive one.

But which company to include in the portfolio to reap the maximum benefit? The answer is simple - Undervalued stock with strong fundamentals. After going through the powerful “Strong Upside” screener (an exclusive feature of InvestingPro+), one stock that caught my attention is Gland Pharma (NS:GLAD) Limited.

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It is a midcap pharmaceutical company with a market capitalization of INR 31,062 crore. Mutual funds are in love with this counter as they hold a sizable 23.01% stake in the company, as of March 2024, up from 20.25% a year ago.

In FY24, the company clocked a record of INR 5,834.96 crore and it was able to make a net profit of INR 772.46 crore, securing a profit margin of 13.24%. Over the last 5 years, the average revenue growth has been 18.29%, beating the industry’s average of 8.34% by a significant margin.

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Now, let’s look at its financial health score in InvestingPro+ to see how all fundamentals stack up. A score of 3 out of 5 denotes good performance and this is the minimum we need to consider any stock for investment.

Image Source: investingPro+

But good fundamentals are not enough if the valuations are stretched. This is where the fair value feature comes in handy as it calculates intrinsic values by different models and compiles the result to arrive at a more realistic and bias-free true value. In this case, a total of 13 models have been used which indicate a fair value of INR 2,242 per share. With the current price of INR 1,841, there is a high upside of 21.8%.

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Read More: The Power of High-Quality Dividend Stocks with a "Screener"

X (formerly, Twitter) - Aayush Khanna

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