Hold Glenmark Pharma - Emkay

Reco: HOLD
CMP: Rs 312
Target Price: Rs 360

Margins under pressure – Downgrade to Hold

- Q3FY12 Results - Revenues at Rs10.3bn (up 38%YoY), b) Adj. EBITDA at Rs1.8bn (up 35% YoY), and c) APAT at Rs1.33bn (up 41% YoY).

- Revenue growth was driven by 11% in India, 56% in US, 58% in Europe and 48% in Latam.

- Despite INR dep. by 13%, gross margins declined 300bps YoY & 120bps QoQ due to higher growth in Latam, Europe, US where margins are lower and lower growth in high margin India business.

- On account of near term growth pressure in India business & margin pressure overall, we downgrade the stock to Hold with a TP of Rs360 (15x FY13 Base EPS of Rs21+ Adj NPV of Rs47).

Source : Equity Bulls

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