Broking house, P-Sec is bullish on Glenmark Pharma and has maintained buy rating on the stock with a target price of Rs 572.
P-Sec report on Glenmark Pharma:
Recently Glenmark has concluded a deal with Merck for its GRC 8200 diabetic molecule and total deal size is EUR 190 million with expected upfront payment of EUR 25million. Upon launch of the product, Glenmark will supply API to Merck and will receive royalties on net sales. Milestone payment of USD 30million from forest labs was expected in Q2 FY07, but has been delayed and the company is expecting to receive it soon. The company is also expecting to conclude one more deal by the end of FY07, which will further upgrade the earnings of the company. We are using the sum of the parts valuation model for the stock."
"We are valuing the core base business of the company on P/E multiple basis at Rs 297 based on FY08 earnings. We have used DCF method for valuing GRC 3886 and GRC 8200 and present worth of the molecules are Rs160 and Rs 115 respectively. Any success and failure on NCE front shall lead to sharp and immediate effect on the stock price. We maintain buy on the stock with a target price of Rs 572."
