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India Equity Research Reports, IPO and Stock News
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TP : Rs401
Investment Rationale
§ Glenmark has strong product pipeline in the US and in the forthcoming quarters the management has guided for
launch of seven new products in the oral contraceptives, oral solids and semi solids space, as well as exclusive
launches
§ Strong performance from key specialties like the derma, respiratory, CVS and pain management, new
product launches coupled with recent addition to the filed force would lead to 16-18%+ growth in the
Indian business. The total MR strength is ~2400
§ Expect Generic business to grow at a CAGR of 18% and Specialty business to grow at a CAGR of 16% over
FY11-13E
§ Domestic formulations (contributes ~30%) continues to grow above industry rates –cash cow for the company
and we expect it to clock revenue CAGR of 15% during FY11-13E.
§ Expect base business earnings to grow at FY11-13E CAGR of 22% over FY11-13E
Valuations
§ We expect earnings to grow at 22% CAGR over FY11-13E. Value the company at 18x FY12 base business
earnings + adjusted NPV of Rs45 to arrive at a target price of Rs401
§ At CMP, the stock is trading at 13.2x/ 13.3x, FY12E/ FY13E EPS of Rs24.0/ Rs23.8 respectively.
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