Buy Glenmark Pharma; target of Rs 2400: Motilal Oswal

Motilal Oswal's research report on Glenmark Pharma

Glenmark Pharma (GNP) reported a lower-than-expected performance in 1QFY26, as revenue/EBITDA/PAT came in 9%/14%/15% below our estimates. The miss was attributed to lower business in the domestic formulation (DF), EU and ROW segments. Moreover, higher opex dented margins.1Q was an aberration in terms of YoY growth in EU and EM markets for GNP. Adverse seasonality impacted EM business and growth also moderated in EU. However, the branded business delivered robust growth.Given its strategy of rationalizing DF portfolio, GNP witnessed moderate YoY growth in this segment.

Outlook

We value GNP on the SoTP basis (27x 12M forward earnings for base business and add NPV related to ISB2001) to arrive at a TP of INR2,400.