Accumulate Glenmark Pharmaceuticals; target of Rs 460: Prabhudas Lilladher

Prabhudas Lilladher's research report on Glenmark Pharmaceuticals

Glenmark Pharma’s (GNP) Q3 EBITDA of Rs6.2bn (flat QoQ) was largely in line with our estimates, aided by higher revenues in RoW (31% YoY growth) and EU markets (30% YoY growth). There has been delay in monetization of Ichnos stake sale. Despite stake sale in Glenmark Lifescience and certain brand divestments in domestic formulation, debt continues to remain at elevated levels. 9MFY23 performance was muted, adjusted for milestone income from Ryaltris. We have factored in 8% EBITDA CAGR over FY23-25E.

Outlook

At CMP, stock is trading at 13x FY24E P/E. We maintain our ‘Accumulate’ rating with unchanged TP of Rs460/share, valuing at 13xSept 2024E P/E. Any potential stake sale in Ichnos and meaningful debt reduction will be key catalyst for stock to re-rate.

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Glenmark Pharmaceuticals - 14 -02 - 2023 - prabhu