Prabhudas Lilladher is bearish on Glenmark Pharmaceuticals has recommended sell rating on the stock with a target price of Rs 365 in its research report dated June 29, 2020.
Prabhudas Lilladher's research report on Glenmark Pharmaceuticals
We increase our earnings estimate (11% FY21 and 18% FY22E) and assigned multiple after taking into account the best possible scenario from our assumptions, as guided by GNP. Q4FY20 performance was led by one-off opportunities and the guidance for FY21E continues with its concerns related to 1)US derma products (25-30% of US revenue) pricing pressures 2)insignificant EBITDA contribution from the new Monroe facility even with qualitative approvals (due to higher operating cost) 3)USD appreciation to increase the gross debt figure 4)LATAM and Semi-regulated market to be impacted due to COVID and currency volatility and 5)much-hyped Favipiravir to fall short of its expectation in coming months.
We continue to maintain SELL with TP of Rs365 (earlier Rs257) based on 12x PE (earlier 10x) of FY22E.
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