Gland Pharma Q4 Results: Profit More Than Doubles, But Misses Estimates

Gland Pharma Ltd.'s consolidated net profit increased 2.4 times in the fourth quarter of fiscal 2024, though it missed analysts' estimates.

The company posted a net profit of Rs 192 crore in the quarter-ended March, as compared with Rs 79 crore in the year-ago period, according to an exchange filing on Wednesday. Analysts tracked by Bloomberg had estimated a profit of Rs 238.83 crore.

• Revenue up 96% to Rs 1,537 crore versus Rs 785 crore (Bloomberg Estimate: Rs 1,531.73 crore).

• Ebitda up 2.13 times to Rs 359 crore versus Rs 168 crore (Bloomberg Estimate: Rs 361.98 crore).

• Margin at 23.3% versus 21.5% (Bloomberg Estimate: 23.60%).

• Net profit up 2.4 times to Rs 192 crore versus Rs 79 crore (Bloomberg Estimate: Rs 238.83 crore).

• Base business (ex-Cenexi) revenue grew 50% YoY to Rs 1,173.7 crore.

• Base business (ex-Cenexi) Ebitda jumped 156% YoY to Rs 430.6 crore.

• Base business (ex-Cenexi) Ebitda margin expanded to 37% in Q4 FY24 from 21% in Q4 FY23.

Capex

Total capex incurred during the quarter-ended March 31, 2024, was Rs 150.7 crore, and for full-year FY24, it was Rs 397.5 crore. This includes capex incurred at Cenexi of Rs 160.7 crore for FY24.

China Market

Progress is slower than expected, the company said. Nine products were filed, and three were approved. One product is commercialised with a limited contribution.

Biologics

It represents a long-term play, and the immediate priority is to obtain regulatory approvals for the facility through existing business and potential near-term wins, it said. Overall, biologics remains a key driver for the company's future growth.

Complex Injectables

Six approvals were received out of 19 submissions. Eribulin was launched as the first major complex product in May 2024. The next two years are important for meaningful results, it said. The company is exploring acquisitions, co-development and partnership opportunities to accelerate growth.

• Q4 revenue declined primarily due to operational disruptions and breakdowns, which caused high order backlogs.

• Delayed tech transfer further impacted Q4 revenue, as new business was intended to replace phasing out business.

Turnaround Plan

• Cenexi is currently in a transitional phase, facing short-term operational challenges impacting performance, it said. The company is facing frequent breakdowns and a high proportion of low-margin products.

• Gland Pharma initiated a comprehensive transformation plan to address operational challenges, with short-term, medium-term, and long-term solutions.

• Active investments are being made in asset upgrades, capacity rebalancing, and future-ready capabilities.

• It has a strong order book, established customer base, ongoing tech transfer projects, and promising growth opportunities.

Outlook

• The company is confident in Cenexi's medium- to long-term potential, despite delays in realising the acquisition's full potential.

• The immediate goal is to increase Cenexi's profitability and deliver high-teen margin in the medium-to-long term.

“We are delighted to close out the last quarter and FY24 with positive results. This year marked a significant rebound for our base business, and we began an exciting new chapter as we completed our first international acquisition, Cenexi, in Europe," said Srinivas Sadu, MD and CEO of Gland Pharma.

"Despite the dynamic business landscape, we've shown resilience and delivered a performance that positions us well for continued growth and success. We see continued momentum in this segment and are optimistic about its future opportunities. The strategic rationale behind Cenexi’s acquisition remains intact, and we expect it to deliver significant value as we move forward,” he added.

Shares of Gland Pharma closed 0.27% lower at Rs 1,796 apiece on the NSE, as compared with a 0.31% gain in the benchmark Nifty 50.