Gland Pharma stock seen underperforming after acquiring France's Cenexi

Lack of near-term visibility on profitability for the core business is another concern about Indian firm

Investors were not too enthused on Wednesday after Gland Pharma (Gland) said it is acquiring Cenexi, a French drug maker, at an enterprise value of 230 million euros (about Rs 2,000 crore).

Gland’s stock was down 5.4 per cent in trade on worries that the company’s first overseas acquisition dilutes margin and will weigh on earnings.

The operating profit margins of Cenexi, which makes ampoules, pre-filled syringes and vials and has expertise in sterile dosage forms, have improved over the last two years, but are still short of Gland’s profitability. Cenexi’s margins in the first half of calendar year 2022