Glenmark Pharma Robust Growth Outlook – Upgrade to Buy ::Emkay

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Glenmark Pharma

Robust Growth Outlook – Upgrade to Buy

BUY

CMP: Rs 338                                       Target Price: Rs 401

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n     Q1FY12 revenues were above our expectations. Revenues at Rs8.6bn (up 27%YoY), b) Adj. EBITDA at Rs1.8bn (up 30% YoY), and c) APAT at Rs1.1bn (up 30% YoY)

n     Revenue growth was driven by a) 28% growth in Speciality business (60% contribution to top-line) and b) 28% growth in Generics business (40% contribution to top-line)

n     Licensing income from Sanofi was Rs. 1.1 bn for GBR 500 compared to Rs. 895 mn from Sanofi last year for GRC 15300

n     On account of good momentum in key business verticals, we upgrade our rating on the stock to Buy with a target price of Rs401 (18x FY12 Base Business EPS + Adjusted NPV of Rs45)