Glenmark Pharmaceuticals Ltd - Hem Securities

As per ORG IMS MAT March 2012 data, Glenmark has gained two rank, from 25th to 23rd. Further, its market share has increased in dermatology from 8.3% to 8.4%, cardiology 2.4% to 2.5% and respiratory from 1.2% to 2.7%.

Glenmark Pharma has registered excellent numbers for the quarter ending March 2012. The consolidated sales surged to Rs.1066.20 crore, up 34% for the March 2012 quarter as against Rs.795.60 crore during the corresponding quarter previous year; helped by healthy growth in the domestic and US market. The Company has registered operating profit of Rs. 221.76 crore for the quarter ended March 2012, zoomed manifold over Rs. 89.28 crore achieved in the corresponding quarter of last year. Virtually every geography (except central and eastern Europe) that the company operates in is profitable at the EBIDTA level. Net profit stood at Rs.150.36 crore as compared to Rs.113.48 crore; an increase of 32.5%. EPS for the quarter stood at Rs.5.56.

Revenue from the generics business was at Rs. 468.53crore, as against Rs. 316.3 crore, a growth of 48%. The Specialty formulation business revenue was at Rs. 594.38 crore as against Rs. 464.03 crore for the corresponding previous quarter, registering growth of 28%.

Glenmark, through its arm Glenmark Generics, launched 12 products in the US market in FY12, most of which were in the dermatology and oral contraceptive segments. It, as of March 31, had 78 generic products authorized for distribution in the US market and 38 ANDAs are pending approval with the US FDA.

Valuation: Strong product pipeline, strong geographical growth and firm guidance by company's management provide Glenmark earning potential going ahead. The stock is trading at an attractive valuation at 15.92x and 13.19x of FY12EPS of Rs.22.36 and FY13EPS of Rs.26.99. We initiate a 'BUY' on the stock with a target price of Rs.450 (appreciation of about 26%) for medium to long term investment horizon.

Source : Equity Bulls

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