Gland Pharma riding the wave of momentum with positive USFDA certification

One stock that has recently captured the attention of traders is Gland Pharma. With a market capitalisation of approximately Rs 28,000 crore and its inclusion in the S&P BSE 200 index, Gland Pharma seems to be on a path of upward momentum.

The stock's impressive performance was underscored by a 9 percent surge just on August 31, a remarkable feat considering it has rallied by an impressive 102 percent from its 52-week low of Rs 861.

The United States Food and Drug Administration (USFDA) issued two observations in favour of the company's Hyderabad plant. These observations were related to a product intended to be manufactured in a pen device form. The most recent news surrounding Gland Pharma has sent ripples of optimism throughout the market.

The excitement surrounding Gland Pharma reached new heights on August 24, 2023, after the company revealed that it had received an Establishment Inspection Report (EIR) from the USFDA, particularly for its Dundigal facility located near Hyderabad in Telangana. This report marks a crucial milestone, as it signifies the closure of an inspection conducted by the US health regulator between July 3 and July 14, 2023.

The significance of this achievement was highlighted by Gland Pharma's disclosure that the USFDA had awarded the company a Good Manufacturing Practice (GMP) certification in connection with the inspection conducted at the Dundigal facility.

The brokerage firm Bernstein has firmly placed their bet on the company's prospects, giving it an "outperform" rating. In their assessment, Bernstein pointed to the first-quarter margins, which exhibited a noteworthy improvement from 21 percent to 24 percent.

As traders assess the potential of Gland Pharma, it's essential to consider its position in relation to its 52-week high. The stock currently stands 33 percent away from its peak of around Rs 2,606.

In terms of valuations, Gland Pharma is trading at approximately 29 times the forward one-year estimate, a significant difference from its peak valuation of 44 times. These numbers paint a picture of the remarkable upside potential that Gland Pharma might be poised to unlock.