Motilal Oswal's research report on Glenmark Pharma
Glenmark Pharma (GNP) delivered an in-line operating performance in 1QFY25. It witnessed robust traction in the domestic formulation (DF) and Europe businesses. However, this was partly offset by muted show in US/ROW markets. We raise our earnings estimates by 11%/17% for FY25/FY26, factoring in a) the niche product pipeline in respiratory for US generics, b) outperformance vs. the industry in DF segment, and c) reduced spending on innovative R&D.
Outlook
We value GNP at 26x 12M forward earnings (from 21x earlier), considering the significant financial deleverage, superior execution in DF and Europe segments, and the scale-up in the US generics segment, driven by limited competition products. Accordingly, we arrive at a TP of INR1,850.
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