Gland Pharma: Morgan Stanley sold its shares of Gland Pharma during a two-day drop in the price of the stock, which had lost one-third of its market value after a bad quarter. No one could figure out who the buyer was.
Shares of Gland Pharma will be in the news on Tuesday morning because Morgan Stanley Investment Funds Emerging Markets Equity Fund sold 9,60,271 of the company’s shares on NSE on Monday for a weighted average price of Rs 930.69 each, which was worth Rs 89.37 crore. Stock markets have information about who owns shares, and it looks like Morgan Stanley did not own more than 1% of the drug company as of March 31. At the end of the March quarter, foreign portfolio investors owned a total of 4.33 percent of Gland Pharma.
Morgan Stanley sold shares of Gland Pharma during a two-day drop in the price of those shares, which had lost one-third of their market value after a bad quarter. No one could figure out who the buyer was.
On Monday, the stock fell 16.56% and closed at Rs 893.50. This was on top of the 20% drop in Gland Pharma shares on Friday, which happened because the company’s profit for the March quarter fell 72% year-over-year because of low demand and the shutdown of production at one of its plants in Telangana. Analysts said that it wasn’t clear what would happen next, even though management said that there were a number of problems that hurt the March quarter results.
Nomura India has set a target price of Rs 1,157 for the stock and said that the company has not given any guidance on sales growth or Ebitda margin. This brokerage has cut its profit forecasts for FY24 and FY25 by 15–17%.
“We determined the fair valuation range for Gland Pharma to be between 15-20 times one-year projected profits. We anticipate the stock will trade towards the lower end of this range due to the elevated uncertainty and vulnerability to general market pressures, the report stated.
Motilal Oswal Securities has actually cut its earnings per share by 22–36% for FY24 and FY25. This is because the scope of business from a customer who went bankrupt has shrunk, business is slowly coming back because another customer switched to a different supplier, and the company is making less money because there is more competition in its existing product portfolio.
“The management mentioned that the business had to deal with a number of problems in Q4, such as a brief shutdown of a production line, fewer supplies to a customer who was having money problems, and continued price drops in the US market. But the details don’t seem to add up. “We are not sure that a bottom is coming in terms of a sustainable level of sales and profit,” Elara Securities said.