Glenmark Pharmaceuticals Ltd. share price target

Glenmark Pharma (GNP) delivered marginally lower-than-expected earnings in 4QFY21, led by subdued growth in the Domestic Formulation (DF) segment, flat RoW sales, and decline in the LatAm business. However, the outlook in the DF segment remains promising, aided by COVID-19 drugs. The Europe business is expected to deliver healthy growth on the back of niche launches and recovery in the base business, with the easing of lockdown restrictions. GNP intends to reduce net debt through free cash flow from its core operations as well as fund raising via the Glenmark Life Sciences IPO....

Despite facing Covid-related challenges in various geographies in Q4, the company posted a stable topline while EBITDA was higher mainly due to better gross margins. Going ahead, the management expects margins to improve due to cost rationalisation measures and decline in R&D; expenses as percentage of sales. Glenmark plans to reduce debt using proceeds from the upcoming API business listing, internal accruals, pipeline monetisation (ICHNOS) and divestment of non-core business. On the capex front, although things are looking a bit strained, the management expects some...

IPM is struggling for growth above 10% even after MoM abating COVID concerns and with MRs, physician activities almost reaching pre-COVID level. We believe key reasons for growth below par are (i) subdued new prescription (Rx) leading to volume de-growth (ii) digital marketing yield going south and (iii) sustained lower demand of acute products. Cardiac and anti-diabetic growth takes a breather in Jan-21 at 8.8% and 5.3% after reporting double digit growth in most months during lockdown. While amongst top therapies Gastro and VMN reported double digit growth of 14%...

ICHNOS Sciences fund raising to get further delayed. We reduce our earnings estimate by 1% for FY22/23E as we lower our growth projections for semi-regulated market. 3QFY21 earnings were in-line with our estimates led by growth in India formulations and cost rationalization. GNP is our top sell idea given 1) US derma portfolio (35% of US revenue) would lag growth due to competition 2) has thin US product pipeline with only 47 pending ANDAs plus guidance of 8-10 new launches in FY21E, 3) 60-65% of...

US generics comprise ~30% of total revenues. So far, the company has received approval for 167 ANDAs while another 44 are pending approval, of which 22 are Para IV applications. However, Glenmark's derma portfolio is facing stiff pricing pressure in the US. Going ahead, traction from the newly commissioned US based Monroe facility will be the key determinant besides sustained product launches. We expect the US to grow at 4.5% CAGR in FY20-23E to | 3581 crore on the back of new launches....

Glenmark Pharma (GNP) delivered in-line sales for 3QFY21. However, earnings were better than expected, led by the Domestic Formulation (DF)/API segment and controlled opex. GNP is confident of sustaining the profitability over the next 1224M, led by a better outlook in DF/US/API and an ongoing cost rationalization exercise. We raise our EPS estimate for FY21/FY22/FY23 by 4%/8%/6%, factoring in a) new launches in DF/US, b) stable price erosion in the US base business, c) an improved outlook in the API segment, and d) benefits from higher operating...

Glenmark Pharmaceuticals Limited is a research-driven company and has established a presence globally.

Glenmark Pharma Ltd (GNP) is an India-based pharmaceutical company with commercial presence in more than 80 countries across the globe. GNP is primarily focused on generics, specialty and OTC businesses. The company has strong regional/country-specific presence in diabetes,...

Guided announcement of ICHNOS Sciences fund raising plan by Dec-CY20. We increase our earnings estimate by 13% for FY22E with situational benefits from Favipiravir (Brand: FabiFlu) in Indian market and lower overhead spend...

Glenmark Pharma (GNP) delivered better-than-expected earnings growth led by Domestic Formulation (DF), ROW, EU, and API segments. DF growth was partly aided by higher off-take of COVID-related medicine. Lower opex further supported better profitability for the quarter. We tweak our EPS estimate for FY21/FY22, factoring in a) better traction in DF, b) cost rationalization benefits, and c) continued pressure on the LATAM business. We also introduce FY23 estimates. We value GNP at 14x 12M forward earnings to arrive at Target Price of INR495. We believe earnings...