Jefferies upgraded the stock to ‘Hold’ from ‘Underperform’ and raised its price target to Rs 1,950 from Rs 1,350, stating that “Gland Pharma’s earnings have bottomed out” and that “the Cenexi breakeven leads to in-line EBITDA.” Jefferies also noted that while the company’s US performance was soft, full-year guidance remained strong, with mid-teens growth expected.
Motilal Oswal was more bullish, retaining a ‘Buy’ rating and raising its price target to Rs 2,340, implying a 19% upside from the previous close. The brokerage expects a CAGR of 14%/20%/27% in revenue/EBITDA/PAT over FY25–27 and sees further margin improvement in the second half of FY26 as Cenexi’s profitability scales up.
“We raise our earnings estimates by 9%/3% for FY26/FY27, factoring in:
a) scale-up of GLP-1 products in other core markets,
b) faster turnaround of Cenexi, and
c) potential launches in the US/EU,” the brokerage said.
Only Goldman Sachs maintained a bearish view, retaining a ‘Sell’ rating with a target price of Rs 1,675. The brokerage acknowledged the 39% year-on-year growth in EBITDA and strong showing from Cenexi, but flagged the underperformance in the US segment.
Cenexi turnaround boosts sentiment
Brokerage commentary focused on the improved profitability of Cenexi, the French CDMO that Gland Pharma acquired in 2023. Jefferies noted that Cenexi achieved EBITDA break-even during the quarter, stating that the “turnaround was led by higher-value tech transfer projects and better utilization across sites.”Cenexi’s sales rose 20% year-on-year, helping lift Gland Pharma’s consolidated EBITDA margin to 24.4%, an expansion of 557 basis points, according to both Jefferies and Goldman Sachs. Motilal Oswal highlighted that excluding Cenexi, the margin was even higher at 34.5%.
Management expects sustained positive EBITDA from Cenexi and noted that “profitability is expected to further improve from the second half of FY26 onward.”
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
