Stock in Action – Glenmark

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 28th May 2024 - 10:21 am

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Glenmark Share Price Movement of Day 

 

Highlights

1. Glenmark Pharma stock witnessed surge following release of its Q4 financial results.
2. EBITDA margin improvement was highlight of Glenmark Pharma's Q4 performance.
3. Double-digit profit growth marked Glenmark Pharma's Q4 earnings report.
4. Revenue growth targets for Glenmark Pharma have been set ambitiously for upcoming fiscal year.
5. Impairment charges had notable impact on Glenmark Pharma's financials in Q4.
6. Glenmark Pharma's FY25 growth outlook appears promising, bolstered by strategic initiatives.
7. Glenmark Pharma received US FDA warning, prompting scrutiny of its operations.
8. India formulation business remained significant focus area for Glenmark Pharma in Q4.
9. Glenmark Life Sciences divestment signaled strategic shift in Glenmark Pharma's portfolio.
10. Glenmark Pharma's Q4 highlights underscore its resilience amidst evolving market dynamics.


Why Glenmark Pharma Stock is Buzzing?

Shares of Glenmark Pharma surged 8.5% to hit 52-week high of ₹ 1,123.90 on May 27, driven by management's optimistic growth outlook for FY25, despite weak Q4 performance. company aims for double-digit profit growth & 10-11% revenue growth for FY25, with EBITDA margin target of 19%, up from 16.5% in Q4FY24. This positive guidance countered concerns from significant net loss in Q4FY24, which was impacted by impairment charges & settlement costs.

Deep Dive into Q4 Results & Management Outlook

Q4 Financial Performance
- Net Loss: Widened to ₹ 1,238.6 crore from ₹ 549.4 crore year-on-year, largely due to impairment charges related to Monroe facility & de-prioritization of certain intangibles, along with settlement costs.
- Revenue: Increased 2% to ₹ 3,063 crore from ₹ 3,000.5 crore in same quarter last year.
- EBITDA: Rose 26.7% to ₹ 504.2 crore, with EBITDA margin improvement from 13.3% to 16.5%.

Impairment & Exceptional Charges
- Monroe Facility: ₹ 2,100 crore impairment for nebuliser/oral solid dosage.
- De-prioritization of Intangibles: ₹ 1,100 crore related to Glenmark Specialty.
- US Settlements: ₹ 300 crore for Department of Justice settlement & remediation costs.

Glenmark Operational Highlights

- India Business: Revenue growth of 12.9% in formulation segment, outperforming overall market.
- North America: Revenue decline of 12.4% due to lack of new product launches.
- Europe & RoW: European business saw marginal growth of 0.9%, while RoW segment grew by 16.1%.

Glenmark Management Outlook for FY25

- Revenue Growth: Target of 10-11% consolidated revenue growth, aiming for ₹ 13,500-14,000 crore.
- EBITDA Margin: Projected to improve to 19%.
- Profit Growth: Aiming for double-digit profit margins.
- Capex & R&D Investment: ₹ 700 crore allocated for CAPEX & 7-7.25% of sales dedicated to R&D to drive innovation & expand product portfolio.

Key Highlights for Q4 FY24 India
1. Glenmark’s India business continued to outperform overall industry in terms of growth (11.4% & 9.9% for Glenmark vs. 5.6% & 7.4% for IPM as per IQVIA January-March 2024 & IQVIA MAT March 2024 respectively).
2. Sustained higher growth in Cardiac & Dermatology therapeutic areas; Respiratory was lower due to high base in same period last year.
3. Continuous improvement in market share across Cardiac, Dermatology and Respiratory therapeutic areas.
4. Launched JABRYUS® (Abrocitinib) novel molecule for moderate-to-severe atopic dermatitis (AD), in partnership with Pfizer.
5. Glenmark Consumer Care:
o Primary sales growth of 3%; full year growth of 14%.
o La Shield™ & Scalpe™ both delivered strong growth for year.

Glenmark’s Key Objectives for FY25

• Consolidated revenue: Rs. 1,35,000 – 1,40,000 mn.
• R&D investment: 7-7.25% of total sales.
• EBITDA margin: ~19%.
• Consolidated CAPEX: ₹ 7,000 mn.
• Target double-digit PAT margin.


Conclusion

Despite challenging quarter with significant net losses due to one-time impairment charges & settlement costs, Glenmark Pharma's stock soared due to strong growth projections & improved operational efficiency. management's focus on expanding EBITDA margins, targeting substantial revenue & profit growth, & investing heavily in R&D & infrastructure has instilled investor confidence, driving stock to new highs.
 

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