India’s pharmaceutical sector is a global leader, accounting for 20% of the world’s generic drug exports. Valued at $50 billion in 2023, the industry is expected to reach $130 billion by 2030. It ranks 3rd globally in volume and 14th in value, driven by strong R&D and manufacturing capabilities.
With a market capitalization of Rs 12,551.22 crore, the shares of Glenmark Life Sciences Ltd were trading at Rs 1,024.35 per share, decreasing around 0.89 percent as compared to the previous closing price of Rs 1,033.50 apiece.
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Looking into Glenmark Life Sciences’s performance, revenue increased by 2 percent from Rs 578 crore in Q1FY24 to Rs 589 crore in Q1FY25. During the same period, net profit decreased by 17 percent, from Rs 135 crore to Rs 111 crore.
ICICI Direct, one of the well-known brokerages in India, gave a ‘Buy’ call on the pharma stock with a target price of Rs 1,295 apiece, indicating a potential upside of 26 percent from Tuesday’s price of Rs 1,024.35 per share.
Here is the rationale behind the bullish potential upside of 26%:
● Revenue Growth: In Q1FY25, the company’s revenues grew by 5% YoY and 11% QoQ to ₹589 crore, driven by a 10% YoY and 7% QoQ increase in non-GPL API sales, and an 18% QoQ rise in API sales to Glenmark Pharma.
● Profit and EBITDA Improvement: Despite a YoY decline, EBITDA and PAT showed solid sequential recovery, growing 13% and 14% QoQ to ₹160 crore and ₹112 crore, respectively, indicating positive momentum under the new management.
● Capacity Expansion: GLS plans to invest ₹700 crore over two years to increase reactor capacity to 1424 KL by FY25 and 2644 KL by FY27, including 400 KL for backward integration, positioning the company for significant growth from FY26 onwards.
● CDMO and Niche Products Growth: The CDMO business is expanding with two new projects expected in H2FY25, while the niche HP API portfolio now includes 20 products, targeting a substantial US$ 40 billion market, driving future growth.
Glenmark Life Sciences Limited is principally in the business of developing, manufacturing, and distributing active pharmaceutical ingredients (API). The Company’s product portfolio includes several therapeutic categories, such as cardiovascular (CVS) illness, central nervous system (CNS) diseases, and anti-infectives.
Written by:- Abhishek Singh
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