India business re-set drags earnings

11 Mar 2024
5 Min read 
  • Glenmark Pharma reported a miss on its 3QFY24 earnings due to inventory reset and weak performance in the US generics segment.
  •  The company has completed remediation measures at its manufacturing site and plans to request a re-inspection from the USFDA.
  •  FY24/FY25/FY26 estimates have been cut to account for reduced domestic formulation business and delays in ANDA approvals.
  •  Efforts are being made to improve outlook through new launches, operational efficiency, and resolving regulatory issues.
  •  The company's revenue declined 28% YoY in 3QFY24, with growth in NA and EU markets offset by a decline in domestic sales.
  •  Gross margin contracted by 750bp YoY due to higher raw material costs and exceptional items.
  •  Glenmark Pharma's valuation factors in the upside in earnings, leading to a neutral rating.
  •  The company expects to file ANDAs and launch new products in the US market, while also focusing on growth in the EU and RoW markets.
  •  Net debt was INR35b at the end of 3QFY24.
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