Categories Research Summary, Research Tear sheet

Gland Pharma Ltd Research Tear Sheet Q1 FY 23

Gland Pharma Ltd is an Indian Pharmaceutical company. It was established in 1978, at Hyderabad, India. The founder is PVN Raju. It has expanded its operation across 60 countries, including the United States, Europe, Canada, Australia, India and other markets. The primary focus of the company is development, manufacturing and marketing of complex injectables. It is  promoted by Shanghai Fosun Pharma, a global pharmaceutical major. The company mainly deals with development, manufacturing, and marketing of sterile injectables. It has a wide range of injectables which include vials, ampoules, pre-filled syringes, lyophilized vials, dry powders, infusions, oncology, and ophthalmic solutions.

Business Traction- The business can broadly be classified under three heads. The India Business, Licensing and Product. The India Business mainly concentrates on B2C marketing. It has 200 + employees and a distribution network that has touchpoints with about 2,000 corporate hospitals, government health centers and nursing homes. It provides wide range of products, which include Anaesthetics, Anti-Infectives, Anti-Coagulants and their Antidotes, Anti-Malarial, Cardiology, Gastro-Intestinal, Pain Management, Orthopaedics, Haematinics, Hormones and Related Drugs, Fertility Supplements, Gnrh Agonists and Antagonists. It has a manufacturing base capacity of 750 million units per annum. The process spreads over seven facilities which include proven Research and Development ,global distribution and sales network, affiliation with national and state level healthcare institutions, compliance with all necessary regulatory boards; and approvals.

Gland Pharma also focuses on licensing. In the early stage it evaluates the requirement of generic product and provides value-added end-to-end solutions, ranging from API development, method development, formulation development to final submission. In the later stage it provides the facility of various stages of development ranging from lab scale developed formulations to ready-to-scale up formulations. It also provides market access to the partners for the developed products. The final stage is product selling. The product is sold over 60 countries and 5 continents.

Plant & Capacity- Gland Pharma has 7 manufacturing facilities, out of which Two sterile injectables facilities are located in Dundigal, Hyderabad and Pashamylaram, Hyderabad. One dedicated Penems facility is located in Pashamylaram, Hyderabad. One oncology facility is located in Vizag. Three API facilities are located in Dundigal, Hyderabad and Vizag respectively. Still the company is targeting more to expand their oncology facility. 

Financial Highlights (₹ in millions)

(₹ in millions)Q1FY23Q1FY22Y-o-Y growth
Revenue from operations8,56911,539-26%
Total Income9,31312,157-23%

Revenue from operations during the quarter has declined by 26% to ₹ 8,569 million. Total Income declined by 23% to ₹9,313 million. For Q1 FY 23 the EBITDA margin stood at 37% and PAT margin of 25%. The EBITDA declined by 31% to ₹3,443 million. The PBT declined by 35% to ₹3,085 million. PAT declined by 35% to ₹2,292 million.   The company incurred R&D expense of  ₹410 million which is 4.8% of revenue. The capital expenses during the quarter stood at ₹414 million. The cash from operation is ₹3,328 Million.

Geographical analysis of Revenue

(₹ in millions)Q1FY23Q1FY22
USA, Europe, Canada and Australia7,0567,507
Rest of the world1,0022,227

USA, Europe, Canada and Australia contribute 82% of total revenue. The total revenue for Q1 FY 2023 declined by 6% to ₹7,056million. Rest of the World markets contribute 12% of total revenue. Revenue from Rest of the World declined by 55% to ₹1,002 million. India contributes 6% of total revenue. The revenue in Q1 FY23 declined by 72% to ₹510 million.

Industry Analysis

The Global generic injectables market size is roughly about $130 Billion in  which US is only $45billion. The global market expects CAGR for generic injectables to be 16.1% in a span of 5 years. As on 2021 the India generic injectables market stood at $2.1 Billion. However it is expected to reach $4.4 Billion by 2027. The CAGR is expected to grow 12.8% during 2022-2027.The reason of growth of injectables in India market is due to the intervention of chronic diseases, rising pollution levels and unhealthy lifestyle of the population.

Major concern for this Industry-Injectables are directly administered into our blood so if something goes wrong it can cause a great damage to the patient. It requires specialized technical capabilities for its complex manufacturing process. The process of manufacture of injectables requires high capital costs and strict quality standards. In US, injectables require prior approval of USFDA, the regulatory body for approving drugs in the US.

Strength, Weakness, Opportunity & Threats

Strength- The Company has a strong reputation in the market. It is constantly investing in innovation. It has expanded its footprint in more than 60 countries.

Weakness- Economic factors can affect the revenue growth. The company has less visibility in the European markets. Moreover the healthcare business is inclined more on digital traction so to survive in this robust digital environment Gland Pharma has to build a new robust supply chain network. That can be extremely expensive. It has not partnered or entered in any joint venture so far. Sterile injectables requires lot of quality assurance.

Opportunity- The Company can focus more on acquisition to enhance their growth in the Pharmaceutical Industry. As healthcare awareness is progressing in India the company can further enhance its business. Since the U.S. economy is constantly improving there is always a chance for Gland Pharma for further development.

Threat-There is a stiff competition with other players of the pharmaceutical industry. The rising cost is a major concern for this industry. There are lots of regulations like FDA approvals which are mandatory for this sector. The company is making a huge investment which is a Healthcare industry disruptor. The business of Gland Pharma can be impacted by US and China trade war, Brexit impacting European Union, and overall instability in the Middle East.

Key Developments

ESG Initiatives- The Company has taken the following initiatives. It has conducted Comprehensive Health Plan for about 2000 socio-economically children from 26 government schools in Hyderabad. This will help them grow and develop to their full potential. It has even  contributed to LV Prasad Eye Institute (LVPEI) in procuring PPE kits, gloves, masks, face-shields and sanitation material for frontline health workers for  Eye Care Vision Centres in Telangana. It has imparted support for children by providing Free breakfast in Schools, Sanitization kits, development of infrastructure and supporting orphanage homes. They have contributed in SwayamKrushi, which is a Hyderabad-based NGO. It gives shelters to  mentally challenged women and addresses their special needs through therapeutic services, music, yoga, speech and physiotherapy. The company has even contributed 1.2 Cr to a ‘Community Cattle Centre’ set up by the Government of Telangana at Siddipet. It has also contributed Rs 20 Lakhs to Nehru Zoological Park (Hyderabad) for well development of wild birds and animals. The company played a major role during COVID-19 pandemic. It distributed PPE kits, N95 masks, 3-ply masks, sanitizer bottles, infrared thermometers and oxy-pulsemeters. They even provided a grant of Rs 1.2 Cr to the Government of Telangana.

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