Glenmark Pharmaceuticals

Glenmark Pharmaceuticals Ltd. reported flattish revenue of Rs. 2344.79 cr up 0.9% Y-o-Y basis. The company reported EBITDA of Rs. 478.07 cr up 39.8% Y-o-Y basis with EBITDA margins of 20.4% for the quarter ended June, 2020. EBITDA margins improved 570 bps mainly on account of cost control measures on all front. Glenmark reported PAT of Rs. 254.04 cr for the quarter against profit of Rs. 109.31 cr reported same period last year.

The management is confident of achieving revival in growth Q2 onwards in all the geographies the company operates in. However, large investments in riskier bets of ICHNOS Sciences have restricted free cash flow generations. Reduction in debt along with growth in topline would further strengthen company’s balance sheet. As the company trades at a fair valuation of 14.7x TTM earnings we opine investors to HOLD with re-rating on cards if capital raising activity in ICHNOS Science goes through.