Glenmark Life hits 52-week high as strong Q4 earnings bolsters sentiment

Stock market today

Shares of Glenmark Life Sciences surged over 9 percent in early trade on April 28, a day after the company posted a robust set of earnings for the March quarter, reflecting growth across all parameters.

The company recorded revenue growth of 20.9 percent on year to Rs 621.3 crore backed by strong traction in the active pharmaceutical ingredients (API) and Contract Development and Manufacturing Organization (CDMO) segments.

Steady growth momentum across regulated as well as emerging markets supported growth in the API business, while a pick-up in demand from a project, which was affected by inventory rationalisation, aided the rise in CDMO revenues.

Strong revenues also aided the drugmaker's bottomline, which rose 48 percent on year to Rs 146.36 crore in Q4. The EBIDTA margin also expanded 500 basis points to 33.7 percent. One basis point os one-hundredth of a percentage point.

"Our strong growth was accompanied by better margins driven by higher contribution from CDMO business, better product mix, PLI benefit and lower input costs," Tushar Mistry, CFO, Glenmark Life Sciences, said in an exchange filing.

"On the balance sheet part, working capital has eased off during the quarter driven by lower inventory levels compared to previous quarter as well as higher payable days. Our cash generation remains strong during FY23 leading to stable debt free balance sheet with healthy cash,” Mistry added.

At 1.21 pm, Glenmark Life Sciences was trading at Rs 514.05 on the National Stock Exchange, up 7.19 percent from the previous close. Earlier in the day, it scaled a 52-week high of Rs 525.

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Volumes were also strong as 14 lakh shares changed hands on the exchanges against the one-month daily traded average of two lakh shares.

Aside from earnings, the company also updated stakeholders of its capacity expansion plans. The drugmaker has commissioned an intermediate manufacturing block at its Ankleshwar site with a capacity of 400 KL. The block will be operational in the second half of FY24.

The company has also completed the brownfield expansion of generic API products and oncology products at its Dahej facility.