Shares of Glenmark Pharmaceuticals Ltd have largely remained under pressure since the announcement of its results for the second quarter which saw the profit after tax rising marginally to ₹279 crore from ₹275 crore.
According to a regulatory filing by Glenmark Pharma, the consolidated revenue for the September quarter increased on year to ₹3,375 crore from ₹3,147 crore.
The stock has corrected about 20.44 percent this year so far while Nifty Pharma has lost around 9 percent during the same period.
Despite the stock falling over 20 percent YTD and a muted Q2FY23, brokerages and analysts are bullish on Glenmark Pharma.
“The performance has not been up to the mark, but the stock however has showed some momentum in last one month, and we expect some up move. Hence traders can buy for a near term target of 450 stop loss…,” said Rajesh Bhosale, equity technical and derivative analyst, Angel One.
With the debut of Ryaltris across the globe and a focus on the branded market, brokerage house Sushil Financial Services Pvt Ltd expects the company to have a strong presence in the local market. It has a ‘buy’ rating on the stock.
“EBITDA margins are likely to improve on account of the optimisation of R&D expenses and scaling up in Europe and LATAM, according to the management in long term,” it said in its report.
ICICI Direct Research has maintained a ‘hold’ rating on the stock, as it continues to monitor progress on various lingering aspects, especially the progress on the profitability front.
Prabhudas Lilladher has ‘accumulate’ rating on the stock, and said that any potential stake sale in Ichnos and meaningful debt reduction will be key catalyst for stock to re-rate.
According to the report, the company’s management in its analyst meet highlighted company’s future growth prospects for achieving double digit revenue growth, and plans on launching branded products for margin expansion, becoming a zero net debt company with optimum R&D spends and attaining of +20 percent RoCE over next 3-4 years.
Brokerage house Motilal Oswal Financial Services Ltd said that it expects a 9 percent earnings CAGR over FY22-24, led by superior execution in the branded generics market of India, Europe, and RoW, and controlled R&D spends.
“Considering the moderate earnings growth over the next two years, regulatory hurdles at Monroe and Baddi, and commercial opportunities from niche products to be more back-ended (FY25 onwards), we maintain our ‘neutral’ stance on the stock,” it said in its report.
On Tuesday, the stock closed at ₹422.30 per share, up 2.61 percent on the BSE.
According to a MintGenie poll, 19 analysts on average have a ‘buy’ call on the stock.
