ICICI Direct has given Buy recommendation for Glenmark Pharmaceuticals with a target price of Rs. 635 in its research report issued on Feb 15, 2021
ICICI Direct’s research report on Glenmark Pharmaceuticals
Q3 revenues grew 1.9% YoY to Rs 2787 crore with 11.8% YoY growth in domestic sales to Rs 882 crore supported by Fabiflu (favipiravir) sales being partly offset by 2.4% decline in US to Rs 780 crore. Europe business grew just 1.4% YoY to Rs 313 crore amid enhanced lockdown measures. RoW markets de-grew 1.6% YoY to Rs 336 crore whereas API segment grew 22.1% YoY to Rs 320 crore. EBITDA margins improved 293 bps YoY to 19.0% mainly due to lower other expenditure, better gross margins. EBITDA grew 20.5% YoY to Rs 530 crore. Adjusted PAT grew 23.0% YoY to Rs 235 crore. Exceptional items in Q3FY21 were Rs 13.4 crore on gain arising from 1) transfer of a) Vwash & b) Momat brands, 2) sale of IP assets, 2) reimbursement of one-time costs.
Outlook
We maintain BUY and arrive at our target price of Rs 635 (unchanged) based on 13x FY23E EPS of Rs 48.9.