Gland Pharma’s profit rose 58% as US sales jumped 42% and its contract manufacturing business grew 31%. It is another sign that Indian drugmakers with the right product mix are doing well in the US despite a tough market.
Gland Pharma reported consolidated net profit of ₹290.8 crore for the September quarter, up 58% from ₹183.7 crore a year earlier. Revenue from operations rose 23% to ₹1,833.6 crore.
Operating profit grew much faster than sales. EBITDA rose 53% to ₹480.4 crore, and the EBITDA margin widened to 26% from 21%. On an adjusted basis, EBITDA was ₹503 crore, a margin of 27%. The gross margin held steady at 63%, and the net profit margin rose to 16% from 12%.
For the first half, revenue rose 21% to ₹3,633.9 crore and profit 52% to ₹607.7 crore.
What drove it
Gland specialises in injectable drugs, medicines given by injection or drip, mostly in hospitals. They are harder to make than tablets, because they must be sterile, so fewer companies compete in each product. That has protected Gland from some of the price pressure that has hurt Indian tablet makers in the US.
US revenue rose 42% in the quarter. That stands in sharp contrast to companies such as Lupin, Zydus and Cipla, whose US businesses were hit by falling generic drug prices this season.
The second engine was contract development and manufacturing, known as CDMO, in which Gland makes drugs for other pharmaceutical companies. That business grew 31%. Contract manufacturing tends to bring longer-term relationships and steadier income than selling generic drugs directly.
Gland received 10 US drug approvals during the quarter and has filed 399 applications in total. It spent ₹108 crore, or 6% of revenue, on research and development.
The soft spots
Not everything improved. Profit fell 8% from ₹317 crore in the June quarter. India revenue fell sharply from a year earlier, a smaller part of the business but one worth watching.
Investors will also focus on the integration of Novelstar Pharma, a US business Gland has acquired to strengthen its presence in the American market. Integrating acquisitions often weighs on margins before it adds to growth.
Gland’s results reinforce a theme of this pharma results season: the companies doing best in the US are those with specialised, harder-to-copy products or a broad, low-cost portfolio, such as Gland’s injectables and Aurobindo’s generics, rather than those relying on a few high-margin tablets that now face new competition.
The results were released on Friday evening, Monday will tell whether the markets liked it or not.
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