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Target: ₹4,040
CMP: ₹3,472.55
Gland Pharma is at an advantage with 11 injectables in the USFDA shortage list with markets size of about $400 million. Currently, the overall number of drugs under shortage in the US has declined to a 15-year low.
However, the number of injectables facing a shortage is at its 20-year average. Among the Indian players present in the US, GLAND appears to be the largest beneficiary from drugs under shortages due to consistent compliance and manufacturing capacity/capabilities.
We expect Gland to deliver 27 per cent earnings CAGR over FY22-24, led by 16 per cent sales CAGR in its core markets, 23 per cent in India, and 43 per cent in RoW – supported by a 200 bps margin expansion over FY22-24.
We value Gland Pharma at 35x 12-month forward P/E to arrive at our target price of ₹ 4,040. We remain positive given: its niche product pipeline in injectables; volume gains in existing products; wider market operations for its portfolio; a strong cash cushion for inorganic growth; and consistent compliance.
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