Curious Case of Gland Pharma: Stock Spikes 10%, Snaps 5-Day Losing Streak

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Curious Case of Gland Pharma: Stock Spikes 10%, Snaps 5-Day Losing Streak
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of pharmaceutical company Gland Pharma (NS: GLAD ) zoomed 9.63% in Tuesday’s intraday trade to hit the session’s high at Rs 979.6 apiece, snapping a five-day losing streak.

The pharma stock has tanked for five consecutive trading days and shed almost 39% in the period, following poor earnings numbers for the quarter ended March 31, 2023.

Gland Pharma reported a decline in all the major financial fronts in the March 2023 quarter, including topline, bottomline, EBITDA, and the EBITDA margin, among other figures, on the back of soft demand in key operating markets and shutdown of a production line in the Pashamylaram Penems facility in Telangana.

To make matters worse for the company, Morgan Stanley (NYSE: MS ) sold shares of Gland Pharma worth Rs 89.4 crore on Monday, while multiple brokerages cut their FY24/FY25 estimates for the stock, further downgrading it.

Analysts attribute today’s bounce in the pharma stock to sharp sell-offs conducted in previous sessions and have termed it a ‘dead cat bounce’, as cited by Mint.

Gland Pharma’s PAT tumbled 72% year-on-year to Rs 78.7 crore in the March quarter from Rs 285.9 crore in the same period last year, while plunging 66% sequentially.

Its revenue from operations fell 29% YoY and 16% QoQ to Rs 785 crore on line upgradation in the aforementioned facility and reduced business from the domestic B2C division.

The Hyderabad-based company’s EBITDA in the quarter under review tanked 52% YoY and 42% QoQ to Rs 168.4 crore, and the EBITDA margin contracted sharply to 21% from 32% YoY.

In FY23, Gland Pharma’s revenue rose 18% YoY to Rs 3,624.6 crore, led by inventory rationalization across US customers, high price pressure with increased competition impacting revenue and margins, and increased base last year led by the sales of Covid-related products.

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