Debt to Equity measures how much total debt and financial obligations weigh against the total amount of shareholders’ equity. Debt to equity shows how heavily a company’s capital structure leans toward debt or equity for its financing, which shows how leveraged the business is financially which is an important metric to look at along with its ability to generate operating profits to repay interest and principal payments.
Pharma and biotech companies have to rely on financing or internal accruals of existing sales until they have received approvals and patents on newer R&D. In such cases, looking at financial leverage metrics is a good idea. Here are 3 midcap pharma stocks that have low debt to equity.
Gland Pharma Limited engages in manufacturing and sale of injectable formulation in India, the United States, Europe, Canada, Australia, New Zealand, and internationally. Gland Pharma stock closed at Rs. 1694.05 on Thursday,up 0.7% from its previous close. It has a market cap of Rs. 27,901 crore and trades 24% above its 200 day moving average.
Gland Pharma has a low debt to equity ratio of 0.00 and has been so for the last 4 FYs. Gland pharma reported de-growth in its financials in the last FY. Revenue has gone from Rs. 3,463 crore in FY21 to Rs. 4,401 crore in FY22 to Rs. 3,525 crore in FY23. During the same period, Net profits de-grew from Rs. 997 crore to Rs. 1,212 crore to Rs. 781 crore. Net Margins have also seen dilution from 28.8% in FY21 to 22.2% in FY23, indicating a decrease of 660 bps.
GlaxoSmithKline Pharmaceuticals manufactures, distributes and trades in pharmaceuticals in India and internationally. GlaxoSmithKline Pharmaceuticals stock closed at Rs. 1559.00 on Thursday, down 0.6% from its previous close. It has a market cap of Rs. 26,410 crore and trades 16% above its 200 day moving average.
GlaxoSmithKline Pharmaceuticals has a low debt to equity ratio of 0.00 and has been so for the last 4 FYs. The company reported growth in its financials over the last few FYs. Revenue has grown from Rs. 2,926 crore in FY21 to Rs. 3,278 crore in FY22 to Rs. 3,252 crore in FY23. During the same period, Net profits grew from Rs. 287 crore to Rs. 381 crore to Rs. 608 crore. Net Margins have also seen accretion from 9.8% in FY21 to 18.8% in FY23, an increase of 900 bps.
Abbott India operates as a pharmaceutical company in India and has internal development and medical teams that work on developing products and clinical trials specifically for the Indian market. Abbott India stock closed at Rs. 22912.80 on Thursday, down 1.3% from its previous close. It has a market cap of Rs. 48,688 crore and trades 5% from its 200 day moving average.
Abbott India has a low debt to equity ratio of 0.00 and has been so for the last 4 FYs. The company reported growth in its financials over the last few FYs. Revenue has grown from Rs. 4,310 crore in FY21 to Rs. 4,913 crore in FY22 to Rs. 5,349 crore in FY23. During the same period, Net profits grew from Rs. 691 crore to Rs. 79 crore to Rs. 949 crore. Net Margins have also seen accretion from 16% in FY21 to 17.8% in FY23, indicating increase of 180 bps.
Written by Sandeep R
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