Jan 30, 2013, 06.58 PM IST
Glenmark Pharma reported stronger-than-expected numbers on all parameters as its consolidated net profit grew by 4.6 times year-on-year to Rs 213 crore in the third quarter of financial year 2012-13.
In terms of Glenmark's numbers there was no problem with regards to the fundamentals of the company this time around. Indian business was strong with a 29 percent growth. The company's business in Latin America is growing, Russia too grew quite significantly this time. The US business clocked around 30 percent on a year-on-year basis. Margins were also quite significantly higher at 23 percent versus 10 percent.
But the real trepidation which came in for Glenmark was because of two factors. One was post the conference call, there was some amount of profit booking coming in because of guidance which was lowered in terms of Indian domestic pharmaceutical business going into FY14.
For FY13, the company will clock around 23-24 percent in terms of Indian growth. This implies that there would be some amount of tempering in terms of growth expectations in Q4. FY14, according to the management, will not be as robust as what they saw in FY13 or it is too difficult to say at this point in time in terms of how exactly the Indian market will pan out. Most analysts are working with the fact that it will be above the industry average which Glenmark Pharma has been outperforming with regards to the industry. For example, it was at 24 percent vis-a-vis 11 percent industry average.
The other point that came out for Glenmark this time around and is weighing more on the stock as opposed to the guidance going forward is Revamilast. Revamilast Phase IIb data with regards to arthritis was not encouraging given the Placebo effects. Hence, they have stopped pursuing Revamilast for arthritis.
However, there is an asthma indication for that particular new chemical entity (NCE) where the results will come out in first half of FY14. So that is a dampener for Glenmark Pharma considering that their NCE pipeline is one of the most anticipated in terms of out licensing revenue and that was also a case in point this quarter where they had Rs 49 crore of milestone payment which came in for its laboratories.
But most of the analysts are only factoring in the partnered innovative products. That means GBR 500 and GRC 15300 - these are two products which are out licensed to Sanofi and that will get some amount of data going into FY14. So analysts are still cautious with regards to Glenmark Pharmaceuticals but these two points were not auguring well for Glenmark this time.
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