Glenmark Pharmaceuticals has seen its stock price surge by 97% so far this year, reaching a 52-week high during Friday’s trading session. Over the past year, the stock has gained about 122%, delivering strong returns to investors.
The rise in Glenmark’s share price is driven by improved earnings, especially highlighted in their strong first-quarter results. The company’s performance in India and Europe has been solid, and analysts expect US sales to pick up in the coming quarters.
Strong Q1 Performance
In the first quarter, Glenmark Pharmaceuticals reported a net profit of ₹340 crore, a significant increase from ₹14.5 crore in the same quarter last year and recovering from a loss in the previous quarter. The company’s revenue grew by 6.9% year-over-year, reaching ₹3,244 crore.
European sales increased by 21.4% year-over-year to ₹696 crore, while the India business grew by 11.9% year-over-year to ₹1,196 crore. The North America business showed a slight sequential growth of 3.3%, though it was still 5% lower compared to the previous year.
Analyst Views
ICICI Securities noted that Glenmark’s first-quarter results were driven by strong performance in India and the European Union, as well as reduced R&D expenses. The profitable India business now accounts for 37% of sales, up from 35% in the previous quarter.
Glenmark’s key respiratory products are expected to boost US growth in the second half of FY25. The company’s 12% year-over-year growth in India exceeded expectations, with management aiming for 10-15% growth in FY25.
Glenmark is also making progress in reducing debt. By the end of FY24, the company had a net cash balance of ₹670 crore. In July 2024, Glenmark sold its remaining 7.85% stake in Glenmark Lifesciences, which will further strengthen its cash position.
ICICI Securities analysts value Glenmark shares at 28.7 times FY25 earnings and 23.5 times FY26 earnings, with a target price of ₹1,345, suggesting limited upside.
However, analysts at Motilal Oswal Financial Services believe that Glenmark is on track for a consistent turnaround, driven by niche product approvals and market expansion for Ryaltris. They set a higher target price of ₹1,850, indicating around a 10% potential upside.
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