Gland Pharma (GLAND) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue rose 2% year-over-year to INR 14,058 million, with base business (excluding Cenexi) up 5% and Cenexi revenue down 5% due to operational challenges and shutdowns.

• EBITDA margin for Q2 FY25 was 21%, impacted by Cenexi's negative EBITDA, while base business margin remained strong at 34%.

• Net profit for Q2 FY25 was INR 1,635 million, a 16% decline year-over-year, mainly due to Cenexi losses.

• Strategic partnership with Dr. Reddy's Laboratories for biologics CDMO business announced; new launches and expansion in complex products continue.

• Leadership transition announced, with new CEO and board appointments to drive growth and strategic initiatives.

Financial highlights

• Q2 FY25 consolidated revenue: INR 14,058 million (+2% YoY); H1 FY25 revenue: INR 28,075 million (+9% YoY).

• Q2 gross margin: 59% (vs. 62% last year); EBITDA: INR 2,961 million (21% margin); PAT: INR 1,635 million (-16% YoY).

• Cash and cash equivalents at quarter-end: INR 28,201 million; net cash position after Cenexi debt: INR 24,953 million.

• Working capital: INR 24,074 million as of Sep'24; cash conversion cycle improved to 78 days from 99 days YoY.

• Capex for Q2 FY25: INR 1,037 million; total capex for H1 FY25: INR 1,674 million.

Outlook and guidance

• Full-year core market sales expected to grow in low double digits, driven by new launches and recovery in ROW and Saudi Arabia.

• Cenexi aims for positive EBITDA in Q4 FY25 and next fiscal year, targeting revenue above €200 million.

• Initial financial benefits from the Dr. Reddy's biologics CDMO collaboration expected from Q1 next year.