'Buy' Glenmark Pharma Maintains Motilal Oswal Citing Growth Potential, Valuation; Sees 26% Upside

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Motilal Oswal Report

We recently interacted with the management of Glenmark Pharma Ltd. to gain a deeper understanding of the company’s business segments.

Glenmark Pharma is actively working to expand its pipeline by adding respiratory products to drive growth in the US market. It has filed three abbreviated new drug application and is in the process of filing three more in the respiratory space over the next 12-15 months.

Following course correction through a change in the distribution model in Q3 FY24, Glenmark Pharma has revived growth prospects in the Domestic Formulation market through new launches, market share gains, and superior execution in the prescription (Rx) and OTC segments.

Glenmark Pharma’s innovation portfolio is progressing well for clinical trials. Specifically, ISB 2001 serves as a potential candidate for out-licensing.

With strategic initiatives implemented across business segments, we expect 11%/17%/20% sales/Ebitda/PAT CAGR over FY25-27, reaching Rs 164 billion/Rs 33 billion/Rs 20 billion. The niche pipeline in the US, continued focus on chronic therapies/over-the-counter in the DF segment, and promising clinical progress of ISB 2001 bode well for growth prospects over the next two to three years.

Reiterate Buy with the price target of Rs 1,690 (24 times 12 months forward earnings).

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