Glenmark Life rallies 10%, hits 52-week high on strong Q4FY23 results

Shares of Glenmark Life Sciences (GLS) rallied 10 per cent to hit a 52-week high of Rs 524.75 on the BSE in Friday’s intra-day trade on the company's strong earnings for the March quarter (Q4FY23).

The drugmaker's net profit jumped 48.1 per cent year-on-year (YoY) to Rs 146.30 crore against Rs 98.80 crore a year ago. Revenue grew 21 per cent YoY to Rs 621.3 crore.

The growth was driven by strong momentum in the generic active pharmaceuticals ingredients (API) and the contract development and manufacturing organization (CDMO) business, which saw robust recovery in the quarter.

Generic API revenues in Q4FY23 increased 10.4 per cent QoQ and increased 15.5 per cent YoY. Steady growth momentum across regulated as well as emerging markets with strong recovery in GPL business and steady growth in external API business led the growth, GLS said.

CDMO revenues at Rs 56.8 crore doubled sequentially and grew 30.4 per cent YoY in Q4FY23. CDMO revenues were driven by a pick-up in demand from one project, which was affected by inventory rationalization, the company said.

EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 45.2 per cent YoY to Rs 206.4 crore whereas margins came at 33.2 per cent against 27.7 per cent YoY, driven by higher CDMO contribution, better product mix, PLI scheme benefit and lower input costs.

In the past one month, the stock has zoomed 40 per cent as compared to a 5.4 per cent rise in the S&P BSE Sensex. It, however, is trading below its issue price of Rs 720 per share. GLS made its stock market debut on August 6, 2021.

The company is a leading developer and manufacturer of select, high-value, non-commoditized, APIs, in chronic therapeutic areas.

GLS said intermediate manufacturing block at the Ankleshwar site with a manufacturing capacity of 400 KL, of which 192 KL is commissioned and operational, and balance 208KL will be operational in second half of FY24.

The company further said it has received an environmental clearance for the installation of 1000 KL capacity along with CTE (Consent to Establish) for the planned Greenfield site at Chincholi Industrial Area, Solapur and construction work will begin in FY24.

The company has good margin profile and is able to sustain the margin despite industry headwinds. With Capex coming live, diversification of product portfolio and increasing geographic presence, analysts expect GLS to perform better.