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Glenmark: Strong growth continues

Feb 11, 2002

Glenmark Pharma continues to outperform industry growth rates. The company has recorded a 31% growth in topline. Profit before tax registered a growth of 54%, on the back of sharp rise in operating margins. Depreciation and Interest showed a sharp spurt however, on account of commissioning of its new Goa facility. The company has also performed impressively on the export front.

(Rs m) 3QFY01 3QFY02 % Change 9m FY01 9m FY02 % Change
Sales 509 667 30.9% 1,430 1,710 19.6%
Other Income 5 1 -87.5% 9 2 -79.6%
Expenditure 417 525 25.9% 1,206 1,353 12.2%
Operating Profit (EBDIT) 92 142 53.5% 224 357 59.1%
Operating Profit Margin (%) 18.1% 21.3% 15.7% 20.9%
Interest 29 33 14.0% 56 95 69.0%
Depreciation 11 22 90.1% 28 64 128.1%
Profit before Tax 57 88 54.4% 149 200 34.2%
Tax 5 33 574.0% 13 40 217.5%
Profit after Tax/(Loss) 52 55 5.3% 136 160 17.4%
Net profit margin (%) 10.2% 8.2%   9.5% 9.4%  
No. of Shares (eoy) (m) 10.1 10.1   10.1 10.1  
Diluted Earnings per share* 20.7 21.8   18.0 21.1  
P/E (at current price)   11.8   12.1  
(*- annualised)            

To strengthen its position in the dermatology and respiratory segments, the company had acquired three large brands of Lyka Laboratories last year for a consideration of Rs 345 m. These include Alex (cough preparation), Flucort (dermatology steroid) and Sensur (pain balm). All the three brands have performed well during the year. The company is consicously reducing its dependence on the dermatology segment by launching products across various therapeutic segment. Some of the company's products launched in the anti-diabetes and cardiovascular segment seem to be doing well.

R&D efforts of the company also seem to be progressing well. The research activities of the company are focused in the areas of diabetes, asthma and pain management.Two molecules of the company are in advanced pre-clinical trial stage.

  • Read our recent company update

    It seems that the company is taking all the right steps to maintain its growth trajectory in future. However, while growth in the domestic market is hard to come, the company is a bit late in cashing on the generic opportunity as it lacks an ANDA (Abbreviated New Drug Application) pipeline. In the domestic market on the other hand, the company faces stiff competition and it would be hard to maintain premium pricing going forward. Considering other peer valuations and a P/E multiple of 12x 9 months annualised earnings, the stock looks fairly valued at the current market price of Rs 255.


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