Glenmark Pharmaceuticals Ltd. share price target

Maintain BUY with a TP of Rs 1,035 (18x Jun-19E and Rs 135/sh for pipeline). Glenmarks (GNP) 1QFY18 performance was in stark contrast to that in the previous quarter. The overall top-line grew 23% YoY, largely on the back of ~50% growth in the US business (gZetia impact). Revenue was also surprisingly boosted by a 15% growth in the India business, despite the GST disruption in the domestic market. The EBITDA margin came in at 23.3%, in line with estimates, up 640bps YoY. PAT grew ~44% YoY to ~Rs 3.2bn.

New product launches to drive growth amid poor Q4 show Glenmark is an India-based pharmaceutical company with commercial presence in more than 60 countries across the globe. The company derives 63% of total...

Glenmark's (GNP) Q4 PAT was below estimates due to significant miss in US sales (USD 150 mn vs. estimated USD 193 mn). The sales miss was led by lower gZetia sales (~USD 50 mn vs. est. ~USD 80 mn) and ~15% price erosion in US base business.

ICICI Securities Ltd | Retail Equity Research Revenues grew 8% YoY to | 2457 crore (I-direct estimate: | 3043 crore) mainly due to 53.5% YoY growth in the US to | 1000 crore (Idirect estimate: | 1534 crore) led by gZetia Exclusivity. Miss vis--vis I-direct estimate was due to lower US traction, way below estimates EBITDA margins increased 481 bps YoY to 18.1% (I-direct estimate: 35.2%). The YoY increase is mainly attributable to lower base margins in Q4FY16. EBITDA increased 46% YoY to | 444 crore Adjusted net profit increased 23.5% YoY to | 184 crore but came in...

Weak Quarter; Higher Price Erosion in US Remains an Overhang Glenmark Pharmaceuticals (GNP) has delivered a weak performance in 4QFY17 due to lowerthan-expected US sales at US$149mn (vs. our estimate of US$190mn). Despite gZetia's 180days exclusivity, sales grew by just 9% YoY to Rs24.3bn owing to~15% price erosion in US base business, lower gZetia sales (~US$ 50mn vs. our estimate of ~US$ 95mn), and weak sales in India and Europe. EBITDA margin declined by 1,210bps QoQ on lower gZetia sales, ~Rs740mn forex loss and higher R&D; spend at 14.8% of sales from 10.9% in Q3FY17. Adjusting for forex loss, margin stood at 21% (vs. reported 18%), while adj. PAT stood at Rs5bn on lower tax (deferred tax on lower gZetia sales and MAT credit). Though the Management looks forward to improvement in US business in FY18 owing to new launches in dermatology segment, but it expects price...

Glenmark's Q4FY17 results were disappointing, revenues and PAT was below our expectation by 11.5% and 7.3% respectively, led by lower than expected revenues from all geographies except US and India. While launch of gZetia was for the full quarter, poor performance of the molecule led to pain at the EBITDA margins, however, extraordinary income cushioned the PAT. Adj PAT was below our estimates by 52%. Revenue increased 6.5% YoY to Rs24.6 bn, EBITDA grew 47.1% YoY to Rs4.4 bn while Adj PAT rose 96.4% YoY to Rs2.8 bn and reported PAT rose 278% YoY to Rs5.4 bn for Q4FY17. For FY18, Glenmark has guided a slower than expected pick up in gZetia, however, remains...

Glenmarks (GNP) 4QFY17 performance was disappointing on all counts. While overall top line numbers were in line with expectations, sales from the US segment and gZetia were not. The EBITDA margin came in at 20.5%, well below estimates.

Burdened by high leverage, continuous investments and setbacks in select geographies like Venezuela, the Glenmark (GNP) stock has significantly underperformed over the last two years. However, with the large gZetia cash flow coming in and monetisation of its novel pipeline, we expect debt reduction to play out and be a key trigger for the stock to re-rate.

We upgraded Glenmark to BUY (Oct 28, 2016), as we believed it is in sweet spot given improvement in its key markets (US, India, Russia) posted 18% revenue growth 9MFY17 (ex-gZetia)