Glenmark Pharma Q2 profit seen up 24% but margin may contract

Glenmark Pharma is expected to report a 24 percent growth in second quarter profit at Rs 245 crore on yearly basis but margin may contract by 160 basis points to 19.4 percent, according to analysts polled by CNBC-TV18.

Revenue during the quarter is seen rising 15.2 percent year-on-year to Rs 2,199.2 crore while operating profit may increase 6.4 percent to Rs 427.5 crore.

Revenue growth may be led by US business that contributed 35-36 percent to overall sales. US is expected to grow at around 20 percent from USD 92 million to around USD 110-112 million YoY, led by price hike in antibiotic cream Mupirocin and launching cardiac drug Crestor Generic.

India business, which contributed 25-27 percent to revenue, can decline 2-3 percent YoY due to high base. It had grown 27 percent in Q2FY16. However, adjusted for the base, it may be 10-15 percent growth YoY against 10 percent growth in Q1. Q1 was impacted due to discontinuation of diabetes drug Sitagliptin sales.

Latin America business is likely to decline around 20 percent YoY, impacted by negligible to no sales in Venezuela. The company still has around USD 45 million of receivables from Venezuela.

Venezuela has been suffering from financial crisis due to fall in oil prices resulting in high receivables.

Rest of the World (Russia, Asia) may see traction on account of key derma and respiratory launches while Europe may show a 10-12 percent growth that is based on in-licensing deals and launches such as asthma drug Seretide DPI.