Glenmark Pharma: Motilal Oswal Sets Price Target at Rs 2610
Glenmark Pharma Falls Short of Expectations in Q4FY26
Glenmark Pharma (GNP) has reported a lower-than-expected financial performance for the quarter, despite revenue meeting estimates. The company's EBITDA fell short by 7%, while its profit after tax (PAT) beat expectations by 9% due to higher other income. In a research report, Motilal Oswal's analysts have dissected GNP's performance, highlighting both areas of disappointment and opportunities for growth.
Domestic formulation (DF) and US traction were lower than expected, while revenue from the Rest of the World (ROW)/EU segment was better than anticipated. However, analysts expect US revenue growth to pick up over the medium term, driven by approved products and upcoming niche approvals. In FY27, these factors are expected to significantly boost the US business. The company's performance in the US segment was also impacted by logistics disruptions caused by the Middle East issue in 4QFY26.
In a positive development, Glenmark Pharma outperformed IPM in the DF segment, according to IQVIA, thanks to superior execution in cardiac, derma, and respiratory therapies. However, the company's growth was impacted by higher traction in superior molecules within diabetes therapy. This underscores the complexities of GNP's business and the need for nuanced analysis.
Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts
Earnings Estimates and Valuation
Motilal Oswal's analysts have tweaked their earnings estimates upwards for FY27 and FY28, reflecting improved growth prospects for the US segment, outperformance in the DF segment, and increased research and development (R&D) spend. The company is valued at 25x 12-month forward earnings, with a target price of INR2,610.
| Segment | GNP's Performance | IPM's Performance |
|---|---|---|
| Domestic Formulation (DF) | Outperformed | Underperformed |
| US Traction | Lower than expected | Not specified |
| ROW/EU Revenue | Better than expected | Not specified |
Note: The table above highlights Glenmark Pharma's performance in comparison to IPM in the DF segment, as per IQVIA.
Investor Takeaway
Glenmark Pharma's financial performance was lower than expected, but the company is expected to pick up in the US market over the medium term.
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