The Sensex and Nifty have reported losses for 5 consecutive sessions. During the same period the number of Covid cases have kept rising in India. Commenting on the current scenario experts have stated that cues from the global market will dictate the course of the stock market today.
After prolonged underperformance the Pharma Sector finally recovered in 2020 post the outbreak of Covid. However, off late these stocks have begun to lose their sheen. This was post a correction that these stocks faced which gave ample time to both retail and institutional investors to accumulate pharma and healthcare stocks at lower prices.
Brokerage firm Motilal Oswal has a ‘Buy’ rating on Gland Pharma with a target price of ₹ 4,040 apiece. This translates to an upside of 24.27% as the stock is trading at ₹ 3250.95 levels.
The brokerage believes that the company is well-placed to gain from the drug shortages in the US. Gland Pharma appears to be the largest beneficiary from the drug shortage, among Indian players in the US. This is because of their manufacturing capacity/capabilities, and consistent compliance.
At present, the drug shortage in the US has declined to a 15-year low. Whereas, the number of injectables is at a record high as a percentage of total drug shortages.
Motilal Oswal also stated that Gland Pharma has a decent opportunity for injectable drugs due to the current shortages to drive near term growth. The new Enoxaparin contract is expected to drive a 16% sales CAGR in its core markets over FY 22-24. Further, the company has 19 ANDAs approved in FY22, which provides near-term support to sales in its core markets.
“We remain positive on Gland Pharma 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,” the brokerage added.
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