The Indian Pharmaceutical Industry is the third largest in production in terms of volume for pharmaceutical medicines and has been growing at a compounded annual growth rate of 9.43 percent over the past nine years.
India caters to over 50 percent of the world’s vaccines, 40 percent of the US’s generic drug demand, and 25 percent of the UK’s medicine needs. The market size of pharmaceuticals in India is expected to reach USD 130 million by the year 2030.
Pharmaceutical stocks are shares of companies involved in the pharmaceutical industry. These companies research, develop, produce, and market drugs and medical treatments.
The debt-to-equity ratio (D/E) is a financial measure that shows how much debt a company has compared to its own money (equity). A higher ratio means that the company relies more on debt, which is technically less favorable, while a lower ratio indicates that the company relies more on its own money, which is a good indicator of financial stability.
Growth guidance is a prediction provided by the management of a company about how much they expect the company to grow in the near future. This includes predictions about revenue, customer acquisition, new product launches, and capital expenditure plans.
Listed below are a few pharma stocks with low debt-to-equity ratios and growth guidance provided by the company:
With a debt-to-equity ratio of 0.16 times, the shares of Glenmark Limited closed at Rs 1,471 apiece on Friday. The market capitalization of this firm stood at Rs 41,511 crores.
Capex guidance:
The capital expenditure (CAPEX) guidance provided by the management of Glenmark Limited indicates a planned CAPEX of Rs 700 crores for FY25, with an estimated CAGR (compounded annual growth rate) of 15-12 percent.
EBITDA guidance:
Glenmark Limited aims for an EBITDA margin of 23 percent by FY27. For FY25, the EBITDA margin is expected to be 19 percent, with a planned gradual increase of 1-2 percent each year.
Revenue guidance:
The revenue guidance provided for FY25 is an estimated growth of around 10-12 percent. Glenmark aims for sales of 1.35 to 1.40 lakh units during the same period.
ROCE guidance:
The management has guided that the firm’s Return on Capital Employed (ROCE) will be about 23 percent in FY27. For the current year, the ROCE stood at 12.4 percent, aiming for a solid 91 percent increase.
Debt guidance:
Glenmark Limited has an estimated debt of around Rs 3,523 crores. The firm aims to achieve positive net cash and become a zero-debt company by divesting Glenmark Life Sciences Limited over the period FY25-FY26.
Latest product launch:
In 2024, Glenmark Limited entered the injectable market with their product Lirafit. This drug helps control blood sugar levels in adults with type 2 diabetes and is 70 percent cheaper compared to other similar treatments, costing less than Rs 100 per day.
The shares of ManKind Pharma closed at Rs 2,135 apiece on Friday. The market capitalization of this firm stood at Rs 85,534 crores. The company has nil debt-to-equity.
EBITDA and revenue guidance:
The EBITDA guidance provided by the management of the company is 25-26 percent for FY25. For the same period, the revenue guidance is 10 to 15 percent.
Acquisition plans:
As of 2024, Mankind Pharma plans to acquire the biopharmaceutical company Bharat Serums and Vaccines for Rs 14,000 crores from Advent International, which holds a 100 percent stake and has been looking to exit since February 2024. Mankind Pharma is competing with Europe’s largest buyout group, EQT, and the Abu Dhabi Investment Authority (ADIA) for this acquisition.
With a debt-to-equity ratio of 0.14 times, the shares of Alkem Laboratories closed at Rs 5,849 apiece on Friday. The market capitalization of this firm stood at Rs 69,930 crores.
The revenue guidance provided by the firm for FY25 is 10 percent. For the upcoming years, the EBITDA guidance remains the same as previous years, at 14-15 percent.
Capex and product launch guidance:
The capital expenditure to be incurred for FY25 is estimated to be around Rs 700 crores. For FY25, the firm is considering six to seven new product launches, including a relaunch of one product.
Written by Zahal
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