Buy Glenmark Pharma; target of Rs 3000: Motilal Oswal

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Glenmark Pharma (GNP) has delivered a better-than-expected operational performance, with a 5% beat on revenue and EBITDA, driven by superior execution in domestic formulations and new launches in North America.
  • The company's domestic formulation sales grew 704.2% YoY, outperforming the industry, while North America sales grew 51.9% YoY, supported by strong underlying growth and deferred out-licensing income recognition.
  • GNP's emerging markets sales grew 33.2% YoY, driven by robust secondary sales growth, continued market outperformance, portfolio expansion, and strong execution across regions.
  • The company intends to be gross debt zero by FY27, strengthening its balance sheet.

Thesis Validation Checklist

  • Investors should watch for continued market share gains in domestic formulations, driven by new launches and sustained momentum in the consumer healthcare portfolio.
  • The success of new launches in North America, particularly in the respiratory and oncology segments, will be crucial for driving growth.
  • Emerging markets sales growth, driven by portfolio expansion and strong execution, will be an important indicator of the company's ability to sustain its momentum.
  • The company's ability to maintain its gross margin expansion and operating leverage will be critical in driving earnings growth.