Moneycontrol Bureau
Mumbai-based healthcare company Glenmark Pharma started off financial year 2016-17 on a strong note with earnings beating analysts' expectations on Friday. Consolidated profit surged 24 percent year-on-year to Rs 226.8 crore on strong revenue and other income but slow operational performance limited growth.
Consolidated revenue in Q1 grew by 18 percent to Rs 1,943 crore on yearly basis, led by good growth across all operating regions except Latin America and out-licensing income.
"The US business continues to perform well and the recent approvals for the business will ensure the growth momentum will continue. Europe business performed well due to strong growth witnessed by the UK subsidiary," Glenn Saldanha, chairman & MD said.
The Rest of World region also rebounded strongly due to a solid performance by the Russian business, he said.
During the quarter, the Venezuela subsidiary sales dropped significantly as compared to the previous corresponding quarter. The Brazil and Mexico subsidiary did not perform as per expectations during the quarter, Glenmark said. It expects the Latin America business ex-Venezuela to pick up in remaining part of the year.Market expert Prakash Diwan said Glenmark has over done expectations but EBITDA growing only 5 percent is what can be a grey shade.Gaurang Shah of Geojit BNP Paribas is optimist on the product pipeline and that management's positive commentary on the US business works in the company's favour.Profit was estimated at Rs 194 crore on revenue of Rs 1,885.7 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
The company said marketing portfolio through June 2016 consists of over 100 generic products authorised for distribution in the US market. The company currently has 62 applications pending in various stages of the approval process with the USFDA, of which 23 are Paragraph IV applications.
Revenue from sale of active pharmaceutical ingredient (API) to regulated and semi-regulated markets globally was Rs 191.23 crore, recording an increase of 41.71 percent YoY.
Glenmark filed two US drug master file (DMF) during the quarter. The good growth was contributed by sale of Teneligliptin (domestic) & Olmesartan (US market), Lercanidipine, Adapalene, Amiodarone, it said.
Other income during the quarter shot up significantly to Rs 76 crore from Rs 5.4 crore in year-ago period.
Operating profit, which was in-line, increased 5.5 percent YoY to Rs 379 crore but margin contracted by 230 basis points to 19.5 percent. Analysts had estimated margin at 19.8 percent for the quarter.
At 11:53 hours IST, the scrip of Glenmark Pharma was quoting at Rs 865.20, up Rs 30.05, or 3.60 percent amid high volumes on the BSE.
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