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On Monday, Nomura/Instinet shifted its stance on Gland Pharma (NS:GLAD) Ltd (GLAND:IN), raising the stock rating from Reduce to Neutral. The firm also adjusted the price target slightly to INR 1,790.00, down from the previous INR 1,800.00. Nomura analysts cited a mix of factors that could influence the pharmaceutical company's future performance, including an anticipated improvement in US exports.
The analysts noted that Gland Pharma's US exports were subdued in the third quarter of fiscal year 2025 due to reduced supplies of Enoxaparin. However, the management expects this to pick up in the fourth quarter of the fiscal year. Nomura believes this could lead to a better product mix and potentially enhance the company's year-over-year gross margin.
Further insights from the analysts suggest that Cenexi, a recent acquisition by Gland Pharma, is projected to show quarter-over-quarter improvement in sales and EBITDA margins, nearing EBITDA breakeven in the fourth quarter of fiscal year 2025. The earnings model was restated by Nomura to reflect the company's performance in the first nine months of fiscal year 2025 and recent foreign exchange movements.
As a result of these revisions, Nomura has reduced its earnings per share (EPS) forecasts for Gland Pharma for fiscal years 2025, 2026, and 2027 by 4.7%, 4.6%, and 4.0%, respectively. The report includes revenue projections for Cenexi, with estimates of EUR 171 million, EUR 210 million, and EUR 240 million for the fiscal years 2025, 2026, and 2027. EBITDA margin forecasts for Cenexi are set at 3.9% for fiscal year 2026 and 11.4% for fiscal year 2027.
Excluding Cenexi, Nomura's EBITDA margin estimates for Gland Pharma are 33.1%, 34.8%, and 35.3% for fiscal years 2025, 2026, and 2027, respectively. The analysts also mentioned that currency depreciation and volume increases from a low base in fiscal year 2025, along with potential fill-finish opportunities for GLP-1 drugs, could support EBITDA margin expansion over the next two fiscal years.
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