Neutral Glenmark Pharma; target of Rs 780: Motilal Oswal

Motilal Oswal recommended Neutral rating on Glenmark Pharma with a target price of Rs 780 in its research report dated August 14, 2023.

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August 22, 2023 / 13:06 IST

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Motilal Oswal's research report on Glenmark Pharma

Glenmark Pharma (GNP)’s 1QFY24 operational performance beat our estimates, led by strong performance in EU/ROW markets. Lower R&D spending resulted in margin expansion YoY as well as QoQ. We raise our earnings estimates by 4%/3% for FY24/FY25, factoring in strong off-take in the respiratory portfolio in EU, increased traction in Ryaltris across focus markets, and healthy traction in the consumer care segment within the India business. We value GNP at 14x 12M forward earnings to arrive at a TP of INR780. Thanks to its consistent efforts, GNP’s growth prospects have improved in the API segment and in the EU/ROW markets and its market share has also improved in core therapies within the domestic formulation (DF) segment. The resolution of regulatory issues is vital for growth improvement in the US segment. We maintain our Neutral rating as we believe the valuation adequately factors in the earnings upside.

Outlook

We raise our earnings estimates by 4%/3% for FY24/FY25, factoring in strong off-take in the respiratory portfolio in EU, increased traction in Ryaltris across focus markets, and healthy traction in the consumer care segment within the India business. We value GNP at 14x 12M forward earnings to arrive at a TP of INR780.

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