Glenmark Pharmaceuticals Ltd. share price target

1QFY21 earnings were mixed bag with revenue lower than our estimate however EBITDA, EBITDAM and PAT were higher due to lower SG&A; (operating leverage). We continue to maintain SELL and retain TP of Rs365(12x PE of FY22E) as its core business continues to witness headwinds that may impact growth and margin. GNP is our top sell idea as 1) US derma portfolio (35% of US revenue) continues to witnesses 15-20% price erosion, 2) has thin product pipeline for US market with guidance of 8-10 new launches...

US generics comprise ~30% of total revenues. So far, the company has received approval for 164 ANDAs while another 44 are pending approval, of which 24 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 5.2% CAGR in...

17 August 2020 Despite reduced sales in India (DF)/the US/ROW/LATAM, Glenmark Pharma (GNP) delivered better-than-expected 1QFY21 performance led by product mix change and sharp reduction in other opex. We have raised our EPS estimate by 19%/14% for FY21/FY22E and raised our P/E multiple to 14x (from 12x earlier) to factor in (a) cost rationalization benefits, and (b) the gradually improving outlook for India and other emerging markets (EMs). Accordingly, we have arrived at a price target of INR495 on 12M forward earnings basis. While 17% earnings CAGR over FY20-22E should be better than the earnings decline over FY17-20, we are yet to see meaningful improvement in return ratios. Revenues grew 2.7% YoY to INR23.4b (v/s est. The YoY growth was driven by Europe and DF, partially offset by decline in RoW markets and LATAM sales. DF (34% of sales) revenue grew 3.7% YoY to INR7.8b. Europe revenue (12% of sales) grew ~13% YoY to INR2.

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,...

29 June 2020 Glenmark Pharma (GNP) ended FY20 in a third consecutive year of earnings decline, albeit at a lower intensity v/s previous years. Reduced price erosion in the US base business, supported by new launches, would further strengthen the earnings trajectory going forward. We raise our EPS estimate by 3%/8% for FY21/FY22 to factor better traction in the US business / Domestic Formulations and cost rationalization benefits. We value GNP on a 13x 12M forward earnings basis to arrive at price target of INR430. The gross margin (GM) contracted by 190bps YoY to 64% due to a change in the product mix. However, the EBITDA margin expanded 120bps to 15.1% down 30bp/280bp YoY as a percentage of sales). EBITDA grew 16.4% YoY to Adjusting for gains (INR329m from Gynecology brand sales / INR350m from FY20 revenues/EBITDA increased 7.1%/2% YoY to INR104b/INR14.8b.

US generics comprise ~30% of total revenues. So far, the company has received approval for 165 ANDAs while another 44 are pending approval, of which 24 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 6.5%...

Exuberance most likely to fizzle out in the near-term. GNP rallied 27% on Favipiravir's (Fabiflu) approval by DGCI (Drug Controller General of India) for treating COVID-19 patients. We believe this reaction has an irrational exuberance and will likely fizzle out in the near-term as 1) Cipla, Strides and Natco/Laurus approval will follow soon leading to a cut-throat...

GPL is primarily focused on building a global Generics, Specialty and OTC business in the therapy areas of Dermatology, Respiratory and Oncology. It also has strong regional/country specific presence in other therapeutic areas like diabetes, cardiovascular and oral contraceptives. Has 5 US FDA approved formulation...

US generics comprise 32% of total revenues. So far, the company has received approval for 165 ANDAs while another 43 are pending approval, of which 24 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 US to grow at ~5% CAGR in FY1922E to | 3626 crore on the back of new launches. Targeting specific therapies in IPM Glenmark is ranked fourteenth in domestic formulations with a market share...

17 February 2020 Healthy traction in existing products and addition of in-licensed products facilitated robust growth in India/LATAM. However, the benefit was more than offset by intensified competition in key products in US generics. We maintain our EPS estimate for FY20/21/22. While the US generics business has a strong ANDA pipeline and the DF/Europe/API outlook remains promising, the return ratios are yet to improve meaningfully. Sales were up 5.1% YoY at INR26.4b (in-line), led by India (+18.2% YoY to INR7.9b; 30% of sales) and LATAM (+54.1% YoY to INR1.6b; 6% of sales) as well as API segment (+9.6% YoY to INR2.6b; 10% of sales). RoW (12% of sales) was muted with 0.4% YoY growth to INR3.