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Glenmark: Zetia Generics Boost Growth - Views on News from Equitymaster
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Glenmark: Zetia Generics Boost Growth
Feb 15, 2017

Glenmark has announced its 3QFY16 results. The company has reported 41% YoY growth in net sales and 143.2% YoY increase in net profits. Here is our analysis of the results.

Performance summary
  • Net sales for the quarter were up by 41% YoY during the quarter. Barring Latin America, all the major geographies have shown a healthy growth for the quarter. The growth in the US business (up 102.1%) was driven by launch of Zetia generics under 180-days exclusivity. Glenmark's base business continued to witness good growth during the quarter. India business was impacted (up 5.9%) due to demonetisation, the company did not change its credit policy. Company expects growth to pick form April 2017. Over and above, the performance in the central and eastern European markets too remained weak for the quarter. On the other hand, the LatAm region continues to remain subdued on account of the base effect arising from the sales of Venezuela. The overall growth for the Brazilian subsidiary in the third quarter continues to be impacted, due to the weak economic environment and lack of new product approvals.
  • Operating margins surged to 30.2% for the quarter from 20.8% in 3QFY16. The sharp surge in the margins was largely attributable to better realizations from Zetia generics. Glenmark launched this drug in Dec 2016. The company will continue to make sales under low competition atleast till April 2017.
  • The bottom line of the company surged just by 143.2% YoY. The other income surged sharply on the back of forex gain of Rs 50 m and interest income. With the sharp surge in the operating revenues, the bottom line witnessed robust growth.

    Consolidated Business Snapshot
    3QFY16 3QFY17 Change 9MFY16 9MFY17 Change
    India 4,880 5,169 5.9% 15,695 17,268 10.0%
    US 6,089 12,308 102.1% 17,683 27,002 52.7%
    RoW 2,363 2,511 6.2% 6,052 6,998 15.6%
    Europe 1,764 1,957 11.0% 4,466 4,804 7.6%
    Latin America 1,237 947 -23.4% 5,079 3,841 -24.4%
    API 1,450 1,921 32.5% 4,454 6,097 36.9%
    Out Licensing Income/ others 0 537 1,274
    Total 17,783 25,350 42.6% 53,429 67,285 25.9%
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