Glenmark Pharma shares drop 3% on lower-than-expected Q4 results: Should you buy, sell, hold?

Glenmark Pharma returns to profit in Q4, but tepid India sales and missed forecasts drag stock lower.

Shares of Glenmark Pharmaceuticals declined on May 26, falling 3 percent to Rs 1,373 apiece, after the company reported a return to profitability in the March quarter but still fell short of Street expectations.

Nomura maintained a "neutral" rating on the stock and set a target price of Rs 1,500 per share. According to the brokerage, while the European business showed robust year-on-year growth of 20 percent, performance across all other segments came in below expectations.

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"In India, revenue growth stood at just 0.4 percent, trailing far behind industry peers. The company attributed this to weaker seasonal demand for respiratory medicines and a drop in diabetes product sales due to intense competition. Additionally, Glenmark missed its full-year FY25 guidance," they said.

The pharma company posted a consolidated net profit of Rs 4.7 crore in the fourth quarter of FY25, a sharp turnaround from a net loss of Rs 1,218 crore in the same period last year. Total revenue for the quarter rose 6.3 percent year-on-year to Rs 3,256 crore, compared to Rs 3,063 crore in Q4FY24.

On the operating front, Glenmark’s EBITDA climbed 11 percent year-on-year to Rs 561 crore in Q4FY25, up from Rs 504 crore a year earlier. This led to an expansion in EBITDA margin to 17.2 percent, compared to 16.5 percent in the corresponding quarter last year.

The company also announced a dividend of Rs 2.5 per share (face value Rs 2) for FY25. The payout is subject to shareholder approval at the upcoming annual general meeting and will be disbursed within 30 days of the AGM.

In terms of annual performance, Glenmark reported strong growth in both the Indian and European markets. The India formulation segment grew by 31.9 percent to Rs 4,485 crore, while revenue from Europe increased 17.6 percent to Rs 2,846 crore. However, other international markets—including Asia, the Middle East and Africa, Latin America, and the CIS region—posted only a marginal growth of 1.7 percent, reaching Rs 2,814 crore.

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