Glenmark Pharma - Management cautions on cooling-off ahead... - ICICIdirect

Glenmark continued to surprise with another robust set of quarterly numbers. Net sales grew 34% YoY to Rs.1381 crore, much higher than Idirect estimate of Rs.1268 crore. Excluding licensing income, the growth stood at 32%. The strong growth was driven by both the specialty and generics business, which grew 34% and 33%, respectively.

EBITDA margins (after adjusting forex effect) stood at 23.2% (I-direct estimate: 19.3%) against ~20% in the corresponding quarter last year on the back of 1) higher licensing income 2) strong growth in domestic formulations, which fetch better margins and 3) absence of MTM forex losses this time around as the company adjusted the same in the balance sheet.

The PAT (adjusted for forex) grew ~45% YoY to Rs.213 crore (I-direct estimate: Rs.147 crore) on the back of improved profitability.

We maintain HOLD as the stock has rallied ~28% since our last recommendation and the YTD growth run-rate is far too ahead of management comfort.

Source : Equity Bulls

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