ICICIdirect.com is bullish on Glenmark Pharma and has recommended buy rating on the stock with a target of Rs 370 in its April 13, 2012 research report.
Technical Outlook: The most important observation on the price chart of Glenmark Pharmaceuticals is that the strong price up move in the last few sessions has resulted in a breach of the key resistance trend line in place since the December 2010 highs of Rs 390 levels. During the whole of 2011, the share price has formed multiple bottoms around Rs 270, which was held on a weekly closing basis despite the overall jitteriness in the broader markets during that time. A breach of the key supply line, which was in place for more than one year (December 2010 to April 2012) signals a decisive victory for bulls after successfully forming a strong base at Rs 270 over the past one year. Such a break-out accompanied by healthy volumes indicates a change of guard from a medium-term trend perspective. Among oscillators, the moving average convergence divergence (MACD) on the weekly chart has ventured into the positive territory above its trigger line, which further substantiates the price break-out. We expect prices to head higher towards 370 plus levels over a medium term horizon. Therefore, we recommend accumulating the stock between 325 and 315 levels with a protective stop loss in place at Rs 285.
Fundamental Outlook: Glenmark has been clocking more than 25% growth in the US market over the last few quarters on the back of ~15-20 product launches in the last 18 months. The company is building a strong product basket in the low competition oral contraceptive segment, which has a market size of US$4 billion. So far, it has received USFDA approval for 10 products and launched five products. These product launches would drive similar growth in the US market, going ahead. It is also clocking moderate double digit growth (as per secondary data) in the domestic formulation market. We expect sales, EBITDA and profit to grow at a CAGR of 19.5%, 11.7% and 19.3%, respectively, between FY11 and FY13E. Shares held by Mutual Funds/UTI Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment
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