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Glenmark Pharma Ltd. recently announced its performance for the quarter ended March 31, 2022. Following are the key highlights

Highlights from the Quarter (Q4 FY22)

Consolidated sales for the quarter were at Rs.3,019.1 cr recording a growth of about 5.6% yoy, with a 7%/17.6% growth in India and Europe business respectively. As per Jan-March '22 IQVIA data, the non-COVID based portfolio of the company grew 15.5% yoy as compared to the non-COVID IPM growth of 10.6% during the quarter. The company took provision to the tune of Rs.39 cr on account of Covid related inventory and has an additional Rs.80-90cr of the products in the trade channel. For the year, Glenmark's India formulation business is ranked 13th, up one rank from last year and its market share has increased to 2.4% as compared to 2.34% last year. Ascoril D Plus became the 10th brand of Glenmark to enter the IPM 300 brand league. The company now has 10 brands in the top IPM 300 brands in the country, up from six brands last year.US sales were down 8% yoy, with high single digit price erosion on the portfolio. The company filed a total of 19 ANDA applications with the USFDA and launched 10 new products during FY22. It plans to file 14-15 ANDAs in FY23. Monroe facility has received Form 483 with 17 observations from USFDA. Glenmark had done a voluntary recall of all its products from this site in August 2021 and since then has not been commercializing any product from this site. The company is hopeful of starting supplying the products from this facility from Q4FY22 onwards. Europe business saw a healthy growth of 17.6% yoy, with easing of Covid restrictions and launch of Ryaltris in several EU countries. Following is the guidance given by the company:

* Revenue growth of 6% to 8% during the year due to the high base of Covid drugs.

* EBITDA margin to sustain at FY22 levels.

* The company expects to close one to two outlicensing agreements in the innovation pipeline

OUTLOOK AND VALUATION

We expect strong positioning in the domestic market, launch of Ryaltris drug in the US market and opening up in Europe tailwinds to play out. However high base in FY22 due to Covid related drugs and high raw material to drag the performance in the near term. We have a BUY rating for a target price of Rs.636 over an investment horizon of 18-24 months.

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