Buy Glenmark Pharma
Posted: Tue Apr 18, 2017 10:15 am
Glenmark Pharma: Marked for growth
CMP (Rs) 884
We recently hosted a roadshow in Mumbai on behalf of Glenmark Pharma (GNP) management. Company sounded confident on 15% growth in base US business ex-Zetia in FY18 provided it garners 15-20 approvals including 5-6 key dermatology ones. Management reiterated Zetia cash flows would be used to retire debt to the tune of Rs7-8bn in the current fiscal. Company reaffirmed inhaler/nebulizer filings by CY19/20 which would drive medium term growth. GNP expects domestic market to rebound by Q2 FY18 and would comfortably clock growth at 1.5x the industry run rate driven by sustained focus on three therapeutic areas. We expect steady growth in the near term ex-Zetia with upward bias in margin; remain constructive at 18x FY19E PE. Lack of anticipated approvals in dermatology and slower growth in Europe/India would be key risks in our view.
IIFL
CMP (Rs) 884
We recently hosted a roadshow in Mumbai on behalf of Glenmark Pharma (GNP) management. Company sounded confident on 15% growth in base US business ex-Zetia in FY18 provided it garners 15-20 approvals including 5-6 key dermatology ones. Management reiterated Zetia cash flows would be used to retire debt to the tune of Rs7-8bn in the current fiscal. Company reaffirmed inhaler/nebulizer filings by CY19/20 which would drive medium term growth. GNP expects domestic market to rebound by Q2 FY18 and would comfortably clock growth at 1.5x the industry run rate driven by sustained focus on three therapeutic areas. We expect steady growth in the near term ex-Zetia with upward bias in margin; remain constructive at 18x FY19E PE. Lack of anticipated approvals in dermatology and slower growth in Europe/India would be key risks in our view.
IIFL