Result Update Glenmark Pharma Company Reports
Glenmark Pharma : Growth Surprises But Margin Lags
Reco : Buy Cmp : 396 Target : 472
Glenmark PharmaⳠ(Glenmark's) Q2FY13 core revenue (excluding NCE income) was up 34% YoY at Rs 12.6 bn. This was higher than our estimate of Rs 11.2 bn led by stronger performance in India (up 35% YoY) and RoW (up 31% YoY).
However, EBITDA margin at 20% was below our estimate of 21% due to higher R&D. Adj. PAT (Rs 1.4 bn; down 34% YoY*; adjusted for Rs 150 mn of forex gain) was below our estimate of Rs 1.6 bn due to higher tax rate (24% vs. 15% expected; management indicated that FY13 tax-rate would be ~18%).
US (up 19% YoY in USD term) and India formulations (up 35% YoY) continue to drive growth. However, we expect domestic growth to come down to 20-22% Q3 onwards. Latam grew 27% to Rs 937 mn despite strike at ANVISA (Brazilian regulatory body). This was led by product launches in Mexico and Venezuela. Management expects Brazil to normalize Q3 onwards, which would sustain Latam growth momentum.
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