Glenmark Pharmaceuticals Ltd. share price target

Maintain buy with a TP of Rs 800 (16x Dec-21E EPS + Rs 135/sh for pipeline). Glenmark reported broadly in-line numbers as revenues grew 16% YoY to Rs 25.6bn, and EBITDA came in at Rs 4.3bn with 17% margin. However, PAT at Rs 1.2bn was much lower than expectation owing to a Rs 1.3bn forex loss included in other income.

Q3FY19 results were in line with I-direct estimates on the operational front. However, net profit was lower mainly due to forex loss Revenues grew 15.9% YoY to | 2555 crore (I-direct estimate: | 2521.0 crore) mainly due to 43.2% growth in Europe to | 321.7 crore (I-direct estimate: | 269.7 crore) and 16.3% growth in the US to | 855.7 crore (I-direct estimate: | 847.9 crore) EBITDA margins improved 237 bps YoY to 17% (in-line with I-direct estimates of 17.4%) mainly due to a 173 bps improvement in gross...

Europe and a favorable FX impact in the US market. Gross margin improved ~165bp YoY to 65.7% due to a change in the product mix. This, along with lower employee expense (-140bp YoY), led to EBITDA margin expansion of 15 February 2019 ~210bp YoY to 15.5%, partly offset by higher R&D; cost (+150bp YoY). Reported PAT grew at a much lower rate (relative to EBITDA) of ~11% YoY to INR1.2b, mainly due to forex loss (INR1.3b). Adjusted for this, For 9MFY19, sales stood at INR71.8b (+7% YoY), EBITDA at INR11b (-8% YoY) and adj. US business grew moderately by ~5% YoY to USD119m.

mix from ROW markets and API sales. The new ANDA launches, favourable forex and steady growth in India formulations kept EBITDA flat despite price erosion of its US portfolio by 8%. The forex loss of Rs1.3bn have impacted PAT to 72% QoQ decline in Q3FY19. Overall GNP's revenues were marginally better than expected considering the benefits of key launches (gWelchol, gVagifem, Tacrolimus, gNitrostat, gMupirocin) in US and better traction in India. The management guided for...

Maintain BUY with a TP of Rs 790 (16x Sep-20E EPS and Rs 135/sh for pipeline). Glenmark Pharmas (GNP) revenue at Rs 25.8bn for 2Q reported a growth of 14/19% YoY/QoQ and beat our estimates by 5%. This was driven by new product launches in the US and traction gained in EM and India. EBITDA at Rs 4.4bn was up 13/27% YoY/QoQ, with margin remaining largely flat at 17% (in-line).

14 November 2018 Glenmark (GNP) reported revenues at INR25.4b (v/s est. of INR25.1b), up ~14% YoY, led by growth across geographies. Gross margin contracted by ~90bp YoY (+100bp QoQ) to 65.3%. EBITDA margin contracted at a lower rate of 30bp YoY to 15.7%, as decline in gross margin and higher other expense (+60bp YoY) was largely offset by lower employee expense (down ~120bp, as % of sales). Reported PAT increased ~93% YoY to INR4.1b, mainly due to forex gains (INR1.3b) and income from sale of its Ortho business (INR3.5b). The impact was partially offset by de-prioritization of certain intangible assets resulting in exceptional expense of INR1.8b. Adjusted for this, PAT declined marginally by ~4% YoY to INR2.

Glenmark Pharma's Q2FY19 results were a beat, Sales/EBITDA/APAT at Rs25.8bn/Rs4.4bn/Rs2.5bn were 19.5%/12.5%/39.6% above our expectations. Except LATAM all regions had a strong traction. We expect Glenmark's sales/EBITDA/net profit...

US growth now mainly dependant on new launches US generics comprise 35% of total revenues and have grown at a CAGR of ~14% in FY13-18. So far, the company has received approvals for 139 ANDAs while another 61 are pending approval, of which 29 are Para IV applications. Key therapies in the US, going forward, will be oncology dermatology and respiratory. The company expects to launch ~12 products. We expect US to grow at 7.4% CAGR in FY18-20E to | 3703 crore on the back of new launches....

Glenmark Pharmaceuticals (GNP) has delivered a better-than-expected performance on all metrics in 2QFY19. Aided by growth in all geographies (except LatAm), its revenue/EBITDA/PAT exceeded our estimate by 4%/7%/12%, respectively. Its revenue grew by 14.4% YoY to Rs25.8bn led by healthy growth in US (+11.5%) to Rs8.1bn, India (+9.5%), RoW (+21.1%) and Europe business (+30.4%), while LatAm sales declined by 5.9% YoY. Gross margin contracted by 83bps YoY to 65.9% due to adverse product-mix, while EBITDA margin remained YoY flat at 17%. Its EBITDA and PAT grew by 13.3% YoY and 16.4% YoY to Rs4.4bn and Rs2.4bn, respectively. We maintain...

We lower our EPS estimates by 8% for FY20E to factor in continued pricing pressure in the base business and delay in company's key drug launches. Strong pending niche ANDA pipeline coupled with expected monetization of Specialty and innovation R&D; pipeline and potential out-licensing deals for its novel drugs are some of the key positives. Hence, we maintain HOLD' rating with a revised TP of Rs695. Weak US sales; Expected key launches to drive business going ahead GNP reported 8.4% YoY decline in consolidated revenue impacted by decline in the US business (down 33% YoY) owing to continued pricing pressure in the US and high base (marketing exclusivity of gZetia in...