Multibagger Glenmark Pharmaceuticals share price rises 97% ytd to 52-week high: Buy or Sell?

Stock Market today: Multibagger Glenmark Pharmaceuticals share price that has risen 97% year to date scaled 52-week high during the intraday trades on Friday. Glenmark Share price has risen close to 122% in a year giving Multibagger returns to investors.

The gains in the Glenmark Pharmaceuticals share price is being led by improved earning traction. Q1 Results held testimony. While the strong India and Europe performance is helping growth, the pick up in the US sales is being anticipated in a few quarters

Strong Q1 performance.

Glenmark Pharmaceuticals Q1 net profit at ₹340 Crore had grown multifold over ₹14.5 crore in the year ago quarter and from a loss in the previous quarter.

Glenmark’s consolidated revenue from operations at Rs. 3244 Crore grew 6.9% year on year against Rs. 3036 Crore in the year ago quarter.

The European sales grew strong 21.4% YoY to Rs. 696 crore while the India Business grew by 11.9% YoY to Rs. 1196 crore.

The North America Business grew by 3.3% sequentially to Rs. 7,81 Crore led by new launches, but was almost 5% lower year on year.

Analyst Views

ICICI Securities post results has said that Glenmark Pharmaceuticals’ Q1 result was driven by better traction in India ( up 12% YoY) and European Union ( up 21%) and lower R&D . Profitable India business accounted for 37% of sales vs 35% sequentially.

The Key respiratory products by Glenmark may accelerate US growth for Glenmark during second half or H2FY25. India growth of 12% YoY was a surprise as per analysts and management target’s 10-15% India growth in FY25.

The deleveraging also has progressed well. At FY24 end, Glenmark had net cash balance of ₹670 Crore. In July’2024, it divested balance 7.85% stake in Glenmark Lifesciences which will further boost cash balance in near term as per ICICI Securities.

The Glenmark share price currently trades at valuations of 28.7 times FY25 and 23.5 times FY26 earnings estimates, and enterprise value by Ebitda (Earnings before interest tax depreciation and amortisation) or EV/Ebitda multiples of 17.1 times FY25 and 14.3 times FY26 earnings estimates, respectively as per ICICI Securities analysts. The target price of ICICI Securities at ₹1345 does not indicate much upside.

However analysts at Motilal Oswal Financial Services say that with niche approvals, market expansion for Ryaltris and product additions through in-licensing, they believe Glenmark Pharmaceuticals is gearing up for a consistent turnaround in its overall performance. Their target price at ₹1850 indicates around 10% upside for the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions