Glenmark Pharmaceuticals Ltd. share price target

Glenmarks strong top line performance (16% YoY) and sequential improvement in profitability led to 24% YoY earnings growth in 1QFY17. Revenues increased to Rs 18.8bn with US business growing at 24% YoY.

Key highlights: Revenues were 3% below our estimates to Rs 19.43bn (+18% yoy). While US sales of US$ 104mn (+24% yoy) was in line of our estimates and Domestic formulations outpaced industry growth, the weak show by Latin America markets led to miss in sales estimates. Visible pricing pressure in US & higher employee cost caused 270bps negative surprise in operating margin at 19.5% (estimated 22.2%) that resulted in 15% below expected EBITDA at Rs 3.79bn. Thanks to forex gain of Rs700mn that supported PAT at Rs 2.18bn (10% below estimated). However, the tax rate was higher at 35% (vs 25% normal). The core earnings (adjusted forex gain and abnormal taxes) were 18% below expectation.Phillip Capital now value GNP at Rs 1000 i.e.19x FY18 EPS, implying 18% potential upside. Re?iterate BUY with a lowered TP of Rs 1000.

ICICI Securities Ltd | Retail Equity Research Revenues grew 17.9% YoY to | 1943.1 crore (I-direct estimate: | 2021.9 crore) mainly due to 24.4% YoY growth in the US to | 698.2 crore (I-direct estimate: | 698.8 crore). India business grew 10.4% YoY to | 513.8 crore (I-direct estimate: | 520.2 crore) EBITDA margins declined 230 bps YoY to 19.5% (I-direct estimate: 21.1%) due to lower gross margins, higher employee cost. EBITDA rose mere 5.5% YoY to | 379.1 crore (I-direct estimate: | 427.0 crore)...

Glenmark Pharmaceuticals' (GNP) Sales, EBITDA & PAT stood at Rs19.4bn, Rs3.8bn & Rs2.2bn, respectively in 1QFY17. Revenue from US business (~37% of sales) rose 18% yoy to US$104mn in 1QFY17 (vs. US$97mn in Q4FY16 & US$89mn in Q1FY16) due to new product approvals. Revenue from India business (~27% of sales) grew by just 10% yoy to Rs5.1bn due to adverse impact of New Pricing Policy and ban on several fixed dose combinations. Revenue from semi-regulated markets (10% of sales) grew 23% yoy due to strong growth in Russia (50% yoy in CC terms). LatAm (~8% of sales) degrew 29% yoy due to negligible contribution from Venezuela and weak performance in Brazil...

off the EBITDA was ~Rs. 460 crore i.e. 20% of revenues. Adjusted for these, margins improved 310bps. Adjusted net profit grew Avg. daily volume (1yr. on NSE)...

Revenues grew 28.5% YoY to | 2281.3 crore (I-direct estimate: | 1849.6 crore) mainly on account of robust growth across geographies. The company witnessed 21.6% YoY growth in the US to...

ROW (+36%) and LatAm (+34%) sales. US sales of US$ 97mn were inline with our estimates.CoreoperatingmarginadjustingforforexlossofRs840mnandonetime SitagliptinrelatedlitigationcostofRs650mn)compressedby~260bpsyoyto19.8%...

However, margin performance was just about in line as improving revenue mix towards bettermargindomestic/USbusinessraisedEBITDAmarginsby80bpsto22.6%.Ledbylower salesandhighertaxincidenceof33%,PAT(adjustedforforexlossofRs270mn)was19%...

US-Big opportunities ahead: USFDA approval for Glenmark generics hasslowed from 18 in FY11 to 6 in FY15 even as 37 plain filings are pending forapproval for Glenmark. The improved approval rate (8 in H1-FY16) should sustain regular growth while incrementally gZetia (with 180 day exclusivity), gZyvox and gVoricanozole should support an 18% CAGR US formulations growth in FY15-18E.