Glenmark Pharma Q1 Review - Operationally Inline; Domestic Formulation, Europe Drive Earnings: Motilal Oswal

Motilal Oswal Report

Glenmark Pharmaceutical Ltd. delivered an in-line operating performance in Q1 FY25. It witnessed robust traction in the domestic formulation and Europe businesses. However, this was partly offset by muted show in U.S./rest of world markets.

We raise our earnings estimates by 11%/17% for FY25/FY26, factoring in-

1. the niche product pipeline in respiratory for U.S. generics,

2. outperformance versus the industry in DF segment, and

3. reduced spending on innovative research and development.

We value Glenmark at 26 times 12 months forward earnings (from 21 times earlier), considering the significant financial deleverage, superior execution in DF and Europe segments, and the scale-up in the U.S. generics segment, driven by limited competition products.

Accordingly, we arrive at a target price of Rs 1,850.

From adjusted profit after tax of a meagre Rs 700 million in FY24, we expect Glenmark to deliver PAT of Rs 16.7 billion in FY26. Glenmark has restructured its business model by focusing on key markets –

1. India, U.S., EU and ROW,

2. hiving off API business, and

3. recalibrating spending on innovative R&D.

With niche approvals, market expansion for Ryaltris and product additions through in-licensing, we believe Glenmark is gearing up for a consistent turnaround in its overall performance. Upgrade to Buy.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.