Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Interesting Articles

| More

Glenmark Pharmaceuticals Limited - Review

Posted On: 2020-05-03 12:49:55

Glenmark Pharma - This is more like a portfolio of pharma businesses, but an interesting company. Capability wise one of the better pharma players. But the focus appears diluted due to the number of segments.

India formulations (31%), US generics (30%), RoW (12%), Europe (10%), Latin America (4.5%), & API business (10%) are the broad segments.

Author - Ravi Sundaram

India formulations - 14th largest in terms of market share. They focus on - cardio, respiratory & derma. They have been executing very well here over the last decade. With domestic pharma as a sector growing well, they are expected to grow in mid teens here. They had a very interesting launch here in mid of FY20- Remogliflozin - first in world for type 2 diabetes. AstraZeneca, J&J, & Boehringer are the peers for this molecule and they have priced Remo half vs peers. This is a 600-700cr growing market and they are growing very nicely here. Over 2-3 years they could potentially have a sizable share in this molecule. They have had other launches as well in domestic market. They should grow a little better than domestic mkt growth rate. In the near term it could be in mid teens.

US generics: 14th largest player by prescription volume. 162 approved ANDAs & 44 pending approval. -> Of this they have 24 para4 applications. They have had quite some challenges off-late here due to price erosion in a few molecules notably Mupirocin - this was trending at sales runrate of $70mn and over the last 2-3 years this has become sub $25mn product. There were a couple of other molecules as well and in the recent qtr, Ranitidine withdrawl which contributed about 2.5mn had some impact. All this meant, US business had subdued growth. Now, mgmt feels they are near bottom in terms of price erosion and they should start seeing growth from here. They had significantly invested (~$100mn) in Monroe facility over the last few years and they expect to commercialize this from 1st qtr. This facility is focused on injectibles, & other specialities. Then they spoke about Ryaltris where they have partnered with Hikma. So there are some triggers for growth in US, but we should wait & watch here. US is a very dynamic market. Their compliance track record has been decent. Baddi facility received some warning letter and they derive about $30mn revenue from here.

Latin America - Here they have been growing interestingly thanks to the tie-up with Novartis and some own launches. The company has guided for decent growth here.

RoW - Russia occupies a major portion of this segment and the market itself is growing in low single digits. Growth here should be muted.

Europe - Compared to the initial high growth, the last few years' growth has tapered. They are coming off a higher base and even here too growth maybe in low single digits.

APIs - Here the inference was, they have guided for decent growth (~10%?) due to various reasons. This area wasn't looked in depth.

Innovation business - They have a innovation business (NCE) which has been guzzling a lot of cash over the last few years. 60% of their R&D expenses goes towards this. They have created a subsidiary in US - Ichonos -> Where they have shelved some of the molecules -> ISB 830 seems to be the flagship product currently close to completing phase 2b by Q1 FY21. They are looking to raise capital in US and if they manage to, R&D expenses should come down and help P&L. But in the current environment, not sure how successful will they be in raising cash? The existing listed business still retains a couple of molecules and wasn't sure here about the reason.

To summarize :

1. ~75-76% of the business (India, US, LatAm, & API) has some growth visibility. It remains to be seen how much how US growth plays out - as there are quite some moving parts.

2. Possibly at peak Debt levels - They are focusing on reducing debt, recently divested VWash to HUL (small contribution) and this does not appear it would happen soon. Should be FY22 before we see something meaningful. But for a business of this size, debt (~4600 gross) doesn't look like a worry.

3. R&D impacting p&l - How quickly they raise capital through Ichonos will have answers to this, but this should come down starting next year.

4. Business trading at 10-12x fwd partially explains the complexities and moving parts - Most of this was due to their focus on innovation business which wasn't looked at well.

Should wait & watch how each of these triggers play out over the next 2-3 years.

Shares of GLENMARK PHARMACEUTICALS LTD. was last trading in BSE at Rs.337.2 as compared to the previous close of Rs. 329.7. The total number of shares traded during the day was 568112 in over 12251 trades.

The stock hit an intraday high of Rs. 359 and intraday low of 334.5. The net turnover during the day was Rs. 196634918.

Source: Equity Bulls

Click here to send ur comments or to

Other Headlines:

How to apply for Rights Issue of Arvind Fashions Limited?

How to apply for Rights Issue of Aditya Birla Fashion and Retail Limited?

An insight on Aarti Surfactants Limited

Covid-19 and its impact on businesses

Nifty Gained 8% in the June Series, Bank Nifty Surged 12%-Highest Since March 19 - HDFC Securities

IMF Growth Revision for India - Acuité Ratings & Research

Co-operative Banks - RBI Supervision - Acuité Ratings & Research

HDFC Securities views on relaxations announced by SEBI

India can reduce China trade deficit by over $8 billion in FY21-22 - Acuité Ratings & Research

How can investors preserve their wealth during times of crisis

JM Financial Yield Enhancer (Distressed Opportunity) Fund I raises Rs.160 crore in its first close

Samco Securities launches BTPT - Buy Today, Pay In Two days for Investors Buying Stocks

No data breach of BHIM app: Report

India's sovereign rating downgrade by Moody's - Acuité Ratings & Research

Banking Sector Credit Trends - Unusual trends - HDFC Securities

Rollover Report for May - June 2020: Angel Broking

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q4 GDP

Mr. Dhiraj Relli views on GDP Numbers - HDFC Securities

Banking Sector Update - NIM compression on the cards - HDFC Securities

May series ends with a bang: Angel Broking

May 2020 F&O Series Expiry - Mr. Nandish Shah, Technical Research Analyst, HDFC Securities

Views on Impact of Locusts Attack on Agriculture - Acuité Ratings & Research

ICAI establishes Center for Audit Quality

Bharti Telecom raised over Rs. 8433 crores through Accelerated Book-build offering of equity shares of Bharti Airtel

SATYA MicroCapital raises INR 105 crore equity funding from Japan-based Gojo & Company Inc.

Mr. Rajnish Kumar, Chairman, SBI & IBA on the announcements made by RBI today

Views of Mr. Umesh Revankar, MD and CEO, Shriram Transport Finance on RBI announcement

Views of Mr. George Alexander Muthoot, MD, Muthoot Finance on RBI announcement today

Views of Ms. Anagha Deodhar - Economist, ICICI Securities on the RBI announcement today

Views on RBI Policy announcement today - Federal Bank

RBI Monetary Policy (May 2020) by Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

Religare Finvest Ltd. on today's monetary policy by RBI

RBI monetary policy announcement - Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

RBI's proactive measure will help revive economy: Dr.Niranjan Hiranandani

Mr. Dhiraj Relli views on today's announcement made by RBI

Views of Mr. R K Gurumurthy, Head - Treasury, Lakshmi Vilas Bank on the RBI announcement today

Suvodeep Rakshit, Vice President & Sr. Economist, Kotak Institutional Equities on RBI announcement

Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research, on today's RBI announcement

General Insurance Sector Update - GDPI continues to decline due to Lockdown - HDFC Securities

Stress in Banking Sector to Continue: Geojit Financial Services

Banking Sector Update - What have banks said - HDFC Securities

Satyam Shivam Sundaram, EY India on measures announced by Finance Minister today

HDFC Securities: Mr. Dhiraj Relli views on Fourth Set of Economic Measures announced by Finance Minister

Structural intervention to spur investments - Ramesh Nair, CEO and Country Head (India) JLL

MNCs & their unlisted subsidiaries - A case of misplaced premium & forgotten risk

India Equity Strategy - FM's package: Addressing liquidity concerns - HDFC Securities

Mr. Umesh Revankar, MD and CEO, Shriram Transport Finance on package announced by FM

Mr. Rajnish Kumar, Chairman, SBI on FM's announcement

Central Government's Atmanirbhar Bharat Initiative - Tata Projects Ltd

FM Stimulus View: Mr. Shachindra Nath, Executive Chairman at Ugro Capital

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019