Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Sell Glenmark Pharmaceuticals; target of Rs 365: Prabhudas Lilladher

Prabhudas Lilladher is bearish on Glenmark Pharmaceuticals has recommended sell rating on the stock with a target price of Rs 365 in its research report dated August 18, 2020.

August 20, 2020 / 02:04 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on Glenmark Pharmaceuticals

1QFY21 earnings were mixed bag with revenue lower than our estimate however EBITDA, EBITDAM and PAT were higher due to lower SG&A (operating leverage). We continue to maintain SELL and retain TP of Rs365(12x PE of FY22E) as its core business continues to witness headwinds that may impact growth and margin. GNP is our top sell idea as 1) US derma portfolio (35% of US revenue) continues to witnesses 15-20% price erosion, 2) has thin product pipeline for US market with guidance of 8-10 new launches for FY21E and only 44 pending ANDA’s, 3) 60-65% of R&D spend towards low visibility specialty products, 4) insignificant EBITDA contribution from the new Monroe facility even with qualitative approvals (due to higher operating cost), 5)USD appreciation may increase gross debts and 6)LATAM and Semi-regulated markets may get impacted due to COVID and currency volatility.

Outlook

GNP guided that its EBITDAM 19% in 1QFY21 may likely be achievable for FY21E due to lower SG&A. We believe SG&A decline of 34% QoQ and 24% YoY looks unstainable, adding that once COVID cases decline its marketing and travelling costs are expected to get back to normal level.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Aug 20, 2020 12:35 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347