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Motilal Oswal Report
Glenmark Pharmaceuticals Ltd.'s shares are likely to remain in focus after domestic brokerage firm Motilal Oswal Financial Services has reiterated its positive stance on the stock, highlighting the potential for a sharp earnings expansion driven by strong growth across key business segments.
The brokerage has set a target price of Rs 2,610, valuing the company at 25x 12-month forward earnings, and expects a sharp improvement in profitability over the next few years.
Motilal Oswal highlighted that Glenmark is sharpening its strategic focus on high-growth segments such as dermatology, respiratory, and oncology to drive expansion in India and emerging markets. These segments are expected to contribute meaningfully to the company's revenue growth going forward.
In North America, the brokerage sees a strong recovery in the generics business, supported by a robust respiratory and injectables pipeline along with improving regulatory compliance. This is expected to accelerate growth in the US market, which remains a key earnings driver for the company.
Another major positive is the company's innovation arm, Ichnos Glenmark Innovation (IGI), which is now self-funded. This significantly reduces the burden on the parent's balance sheet while enabling Glenmark to file one Investigational New Drug (IND) application annually, ensuring steady progress in the innovation pipeline.
Financially, Motilal Oswal expects Glenmark to deliver a revenue CAGR of 13–15% over the medium term, while Ebitda margins are projected to expand to around 23% by FY28, supported by improved product mix and operating leverage.
The brokerage noted that FY26 marked a reset year for the company, setting the stage for a strong earnings cycle ahead. Ebitda is expected to rise sharply from around Rs 1,300 crore in FY26 to Rs 4,000 crore by FY28, while PAT is likely to nearly quintuple from about Rs 570 crore to Rs 2,600 crore over the same period.
Improving profitability is also expected to drive better return ratios, further strengthening the investment case for the stock.
However, key risks include regulatory challenges in the US market, pricing pressures in generics, and execution risks in scaling up the specialty and innovation business.
Overall, Motilal Oswal remains bullish on Glenmark Pharma, citing a sharp earnings recovery, strong pipeline visibility, and improving financial metrics as key catalysts for potential upside in the stock.
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