Glenmark Pharma Q1 PAT seen down 38% at Rs 131 cr

Glenmark Pharma is set to declare its results for the quarter ended June 2012 on Thursday. Analysts on an average expect the profit after tax to fall by 37.62% year-on-year and 13.8% quarter-on-quarter to Rs 131 crore during the quarter.

Revenues are seen going up by 18.3% YoY to Rs 1028 crore during the same period, but the same on QoQ basis to fall by 3.6%.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 30% YoY and 6% QoQ to Rs 208.3 crore in the first quarter of FY13.

Operating profit margin is seen declining at 20.3% in the quarter ended June 2012 as against 34.2% in a year ago period and 20.8% in the previous quarter.

Investors should watch out for licensing income as there was no deal or milestone announcement in the quarter. Even in the fourth quarter, there was no licensing income.

Analysts expect the company to report strong growth in the US due to Malarone, Ortho-tricyclene and Cutivate.

In the March quarter, US business grew by 53% to Rs 343 crore (which contributes 32% of total sales) due to rupee depreciation. 

Most analysts expect the domestic business of Glenmark to grow by 20%. In Q4, India grew by 24% to Rs 270 crore (25% of total sales) led by market share gains in derma / respiratory & cardiac.

In 4QFY12, domestic growth was driven by volume growth of 14% and 4% from new launches.

According to analysts, speciality business will be driven by semi-regulated/Latin American besides India. In Q4, the speciality business went up by 25% in semi regulated markets to Rs 182.8 crore and up by 43% to Rs 71.4 crore in Latin America.

As a whole, speciality business was up 28% YoY to Rs 584 crore in the March quarter.

Earlier the management guided for debt reduction through free cash flow generation. Net debt, as of quarter ended March 2012, was at Rs 1,924 crore; out of which 80% is in foreign currency.

In Q4, interest cost increased QoQ by Rs 15 crore due to shift in short term debt to long term debt that resulted some upfront payment.

Analysts expect the R&D expenses to remain high at 6-7%. R&D expenditure for FY12 stood Rs 256 crore, out of which Rs 151 crore was for innovation research and Rs 105 crore for generic research.