Buy Glenmark Pharmaceuticals; target of Rs 2300: Deven Choksey

Deven Choksey's research report on Glenmark Pharmaceuticals

Consolidated revenue increased marginally by 0.6% YoY (+0.3% QoQ) to INR 32,644 Mn., stood sharply below our estimates, led by weaker growth traction across the geographies. EBITDA decreased by 1.3% YoY (+3.5% QoQ) to INR 5,805 Mn., stood sharply below our estimates, led by poor operating leverage on account of miss in revenue and higher operating expenses. Adj. net profit increased by 8.8% YoY (-2.0% QoQ) to INR 3,701 Mn., stood sharply below our estimates, led by poor operational performance. Gross margin expanded by 311bps YoY (+233bps QoQ) to 68.9%, led by improved product mix from branded markets, discontinuation of low-margin tail-end brands, and stronger contributions from high-value therapies. EBITDA margin contracted by 35bps YoY (+55bps QoQ) to 17.8%, impacted by higher R&D spend, one-off severance and plant-related costs, along with higher operating expenses on account of new launches, offset by gains in gross margin.

Outlook

We have rolled forward our valuation to Jun’27 estimates. We value Glenmark Pharma at 26.5x Jun’27 EPS (~avg. of 1-year and 3-year Avg. NTM P/E), implying a target price of INR 2,300. We reiterate our “BUY” rating on the stock.

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Glenmark - 03092025 - deven