Goldman Sachs downgrades Gland Pharma to 'sell', sees 19% downside; shares crack 4%

Gland Pharma shares have traded flat over the past 12 months, notching single digit gains of 7.5 percent.

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26 Aug, 2025 12:21

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Gland Pharma shares extended their losses in trade on September 27, falling the most in seven weeks, after international brokerage Goldman Sachs downgraded the counter to a 'sell' rating from 'buy'.

Goldman Sachs also slashed its target price to Rs 1,500 per share, down from Rs 2,075. This implies a downside of around 19 percent from the closing price of the previous session.

The downgrade comes as the brokerage believes that there are many headwinds which are impacting the pharma player's profitability.

At 12.50 pm, Gland Pharma shares were quoting Rs 1,786.65 on the NSE, lower by 3.34 percent compared to the previous session's closing price.

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Goldman Sachs anticipates challenges from growing dependence on lower-margin legacy products, increasing pricing pressures and competition in key U.S. markets, and possible delays in launching higher-margin products.

Goldman Sachs views Gland Pharma's current valuation as expensive, with a 12-month forward PE ratio of 28 times, compared to 20 times for its key injectable peers.

The drugmaker's net profit slipped 26 percent on-year to Rs 143.8 crore in the April-June quarter, largely due to lower milestone income. Revenue rose 16 percent to Rs 1,401.7 crore as against Rs 1,208.7 crore in the year ago period. Despite that, Gland Pharma's operational performance took a hit.

Gland Pharma shares have traded flat over the past 12 months, notching single digit gains of 7.5 percent. In comparison, the frontline Nifty 50 index jumped 32 percent in trade during the same time period.

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