Glenmark Pharmaceuticals - March 2013 Results Preview - Motilal Oswal

- We expect Glenmark Pharmaceuticals (GNP) to post 19% YoY growth in core revenue (excluding one-offs and R&D income) for 4QFY13E at INR12.24b, led mainly by like-to-like growth of 28% in the US generics business. Branded business is likely to grow 15% YoY. We expect R&D licensing income of INR243m (nil recorded in 4QFY12).

- Core EBITDA is likely to grow 44% YoY to INR2.35b, while core EBITDA margin will increase by 340bp YoY, mainly due to the low base of 4QFY12, which saw adverse sales mix.

- GNP is likely to report adjusted PAT of INR1.4b, up 5% YoY, impacted by higher taxes and lower other income. GNP will report lower forex gain due to change in reporting currency for its foreign subsidiary. Company is likely to start reporting the NCE clinical data for various NCEs commencing with the asthma trial data for Revamilast in April 2013 and three other NCEs in 1HFY14. This will be an important news flow to track as favorable data can facilitate potential out-licensing deals for some NCEs. However, our estimates exclude these upsides. The stock trades at 17.7x FY14E and 14.7x FY15E EPS. Maintain Buy.

Source : Equity Bulls

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