Hold Glenmark Pharmaceuticals; target Rs 358: Nirmal Bang

17010 Investors following Glenmark. Share this News with them.

0

Like this story, share it with millions of investors on M3

Hold Glenmark Pharmaceuticals; target Rs 358: Nirmal Bang

Nirmal Bang has recommended hold rating on Glenmark Pharmaceuticals with a target price of Rs 358, in its November 18, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Canara Bank; target of Rs 650: Sushil Finance Buy KEC International; target of Rs 59: Unicon Investment Hold Tata Motors; target of Rs 195: LKP ALSO READ See previous views by Nirmal Bang See what other Experts & Brokerages are saying about Glenmark See messages about Glenmark Glenmark BSE | NSE 01/06/12 Are Mutual Funds betting on Glenmark?

Nirmal Bang has recommended hold rating on Glenmark Pharmaceuticals with a target price of Rs 358, in its November 18, 2011 research report.

Glenmark Pharmaceuticals reported better than expected total income with 42% yoy growth at Rs 1055.7 crs including outlicensing income of Rs
118.5 crs. Excluding that, also the sales growth was impressive 29.4% at Rs 937 crs. However, due to onetime royalty payment to Paul Capital of Rs 131.7 crs net profit showed a decline of 50% yoy at Rs 55.9 crs.

• EBITDA includes forex loss of Rs 85 crs, which affected the margins. For Q2FY12 EBITDA margins were 21.4% as compared to 25.2% in Q2FY11.
• Interest has decline on sequential basis form Rs 41 cr in Q1FY12 to Rs 29 cr in Q2FY12 as the company has shifted local debt to foreign. Interest is expected to remain in similar range in coming quarters
• The company launched Malarone (the company has FTF exclusivity on the product) during the quarter which also supported the strong sales
growth
• Specialty business (excluding out-licensing income) grew by 29% led by semi regulated markets (67.6%) and India formulations business (13%)
• Generics business grew by 22% led by strong growth in US (34%) and Europe (22.5%)
• Company has guided for 200-250 crs of capex for FY12
• Management maintained its 25% growth guidance for F12 with 21-22% EBITDA margins

At the current price of Rs. 310, Glenmark is trading at a PE of 15.6x FY12E & 13.4x FY13E earnings. The valuations look attractive at current levels given improved revenue outlook, strong R&D pipeline and improving balance sheet status. Based on our EPS of Rs 19.9 and price multiple of 18x FY12E, we arrive at a price target of Rs 358. We recommend HOLD on the stock with a long-term view," says Nirmal Bang research report.

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment