Visit http://indiaer.blogspot.com/ for complete details �� ��
Glenmark Pharmaceuticals
Q2FY11 – Good qtr, inline with estimates
�� Q2FY11 Sales: Rs 7.2bn (+23%YoY, 22% QoQ) with UBS-e of Rs 7.3bn
Q2 sales grew strongly driven by strong growth in India, Latam and Europe (both
speciality and generics) and API businesses. US revenues grew 20%qoq to
US$48mn helped by Tarka launch at end of Q1. According to mgmt., Tarka is
clocking US$4m-5mn/qtr. Next hearing on Tarka litigation is scheduled for Jan’11.
Co. plans to launch 6 products in U.S in the next quarter. Mgmt. expects 20%-25%
growth in US base business in FY12. Co filed 2 ANDAs during the qtr.
�� Q2FY11 EBITDA: Rs 1.7bn (+9% yoy); PAT: Rs 1.12bn (+29%yoy)
EBITDA margin declined 300bps YoY (+150bps qoq) to 23.5% primarily driven
by a sharp increase in raw material expenses. The R&D expense was Rs 350mn for
the qtr and the co. expects Rs 1.5bn of R&D spend in FY11. The co. booked an FX
gain of Rs 120mn helping drive PAT to Rs 1.12bn (UBS-e: Rs 1.2bn).
Receivable days for the co. declined from 165days in FY10 to 131days by
Q2FY11. Also, gross debt (including securitized receivables) declined from Rs
22.6bn as of Q4FY10 to Rs 19.5bn as Q2FY11. We believe these signs are
encouraging. Mgmt. believes they can improve these levels further by year end.
�� Valuation: Maintain Sell, PT of Rs 270
We derive our price target using DCF-based methodology and explicitly forecast
long term valuation drivers using UBS’s VCAM tool using a WACC of 12%. We
do not attribute any value to the NCE pipeline. We will revisit our estimates given
strong US product launch outlook over next 12 months.
No comments:
Post a Comment