Glenmark Pharmaceuticals Ltd. share price target

Glenmark Pharma (GNP) posted a marginally lower-than-expected operating performance in 4QFY25 (2%/5% miss on revenue/EBITDA). Elevated interest outgo and lower other income led to a 16% miss on earnings.

As the stock is not under our coverage, we do not offer a valuation. However, Glenmark pharmaceuticals is trading at 18x FY27 PE (Bloomberg Estimates).

As the stock is not under our coverage, we do not offer a valuation. However, Glenmark pharmaceuticals is trading at 18x FY27 PE (Bloomberg Estimates).

Glenmark Pharma’s revenue was largely in-line with our estimates due to strong growth in India and Europe. However, EBITDA missed our estimates due to higher-than-expected employee expenses and other expenses.

Glenmark Pharma’s revenue and EBITDA was in-line with our estimate where Adj. PAT beat our estimate due to lower-than-expected depreciation expense.
We believe the upcoming launches of Ryaltris in multiple new markets and the anticipated filing of Envafolimab in over 20 markets are expected to provide a future boost.

Glenmark Pharma (GNP) delivered an in-line operating performance in 1QFY25. It witnessed robust traction in the domestic formulation (DF) and Europe businesses.

Glenmark Pharmaceuticals’ (Glenmark) Q1FY25 result was driven by better traction in India (+12% YoY) and EU (+21%) and lower R&D (-190bps).

EBITDA beat our estimate due to improved products and geographical mix.
The stock is trading at 24.9x/19.4x based on FY25E/FY26E EPS respectively.

pairment of INR23b
? Glenmark Pharma (GNP) posted lower-than-expected revenue in 4QFY24.
However, it delivered better-than-expected profitability for the quarter,
aided by an improved product mix and lower raw material costs. Having said
this, GNP has taken a considerable impairment charge on manufacturing
facilities and certain intangibles (~INR32b) during the quarter

Nirma Limited has completed the purchase of 91,895,379 equity shares, constituting 75.0% of
Glenmark Life Sciences Limited's issued and paid-up equity share capital, from Glenmark Pharma, as per the terms of the share purchase agreement dated September 21, 2023. This transaction was
finalized at a rate of INR 615/- per share, amounting to a total consideration of INR 56,515 Mn, and was concluded by March 12, 2024.

For Q3FY24, Glenmark Pharma’s revenue declined by 19.1% YoY (-21.8% QoQ) to INR 25,067 Mn (excluding Glenmark Life Sciences). For 9MFY24, revenue increased 2.0% YoY to INR 87,501 Mn.

Glenmark Pharma reported a revenue growth of 6.3% YoY/ 5.6% QoQ (excluding Glenmark LifeScience) to INR 32,074 Mn, which was driven by solid growth in Europe and the Rest of the World in Q2FY24. Including the life science business, the revenues stood at INR 35,879 Mn, a growth of 6.3% YoY.

Glenmark Pharma (GNP) is divesting 75% stake in its API arm Glenmark Lifesciences (GLS) for INR 56.5bn (INR 615 per share) to Nirma Limited valuing GLS at 11.7x FY25E EPS and 6.4x EV/EBITDA. GNP, though, will still hold nearly 7.8% stake in Glenmark Lifesciences. The proceeds from the transaction will be used to pare off debt (INR 43.4bn at the end of FY23) of GNP. We believe the proposed transaction may have a negative impact of 10% on FY25E revenue (of INR 172bn) and EBITDA margin may shrink 150bps, though, repayment of debt may partially offset the impact.

Traction in Ryaltris across EU and RoW markets drove a robust 22.5% YoY growth in Glenmark’s revenue in Q1FY24. Divestment of Razel and other derma brands took a toll on India growth (up 2.8% YoY).