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Glenmark: Zetia Bolsters Sales and Profits - Views on News from Equitymaster

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Glenmark: Zetia Bolsters Sales and Profits
Oct 30, 2017

Glenmark announced its results for the first quarter ended June 2017 (1QFY18). Revenues and net profits grew by 20% YoY and 47% YoY respectively during the quarter.

Performance summary
  • Glenmark's revenues grew by 20% YoY during the quarter led by the US business which was up by an impressive 50% YoY. This was largely on account of the 180-day exclusivity for Zetia generics, which ended in June 2017.
  • India and Rest of the World (ROW) markets grew by a decent 15% YoY and 16% YoY respectively, while growth in the Europe business was tepid at 8% YoY. Latam business did badly as revenues plunged 46% YoY largely on account of problems in Venezuela.
  • Operating profits grew by a robust 52% YoY as margins expanded by 5.2% to 24.4%. This is largely because of higher margins enjoyed during the exclusivity period for Zetia.
  • Although growth in net profits was healthy at 47% YoY, it was lower than that in operating profits because of a surge in interest costs.

    Consolidated financial snapshot
    (Rs m) 1QFY17 1QFY18 Change
    Net sales 19,694 23,630 20.0%
    Expenditure 15,903 17,856 12.3%
    Operating profit (EBIDTA) 3,791 5,774 52.3%
    Operating profit margin (%) 19.2% 24.4%  
    Other income 759 153 -79.9%
    Depreciation 642 777 21.0%
    Finance costs 430 709 64.6%
    Profit before tax 3,477 4,441 27.7%
    Tax 1,209 1,108 -8.4%
    Profit after tax/ (loss) 2,268 3,334 47.0%
    Net profit margin (%) 11.5% 14.1%  
    No. of shares (m)   282.2  
    Diluted earnings per share (Rs)*   46.0  
    P/E ratio (x)   13.1  

    *on a trailing twelve months basis excluding extraordinary items

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