Glenmark Pharmaceticals Q3FY14 Net Profit Up By 32%

Mumbai based Glenmark Pharmaceuticals have came out with really good set of numbers for the quarter ended December 2013. The topline of the company on a consolidated basis increased by 15.93% on YoY basis for Q3FY14 to stand at Rs 1601.75 crore as against Rs 1381 crore reported during the same quarter last fiscal.

Revenue from the Generics Business (46% of revenues) came in at Rs 737.27 crore as against Rs 591.11 crore witnessing a growth of 24.73% on YoY basis. The other segment Specialty Formulation Business (54% of revenues) excluding out-licensing revenue of Rs 49.30 crore came in at Rs 863.96 crore as against Rs 740.85 crore reported during the same quarter last fiscal recording a growth of 16.62%.

On the EBITDA front, the company has witnessed a growth of 35% (adjusting for one time out licensing income) on YoY basis to stand at Rs 365 crore and the EBITDA margins came in at 22.79% which expanded by 320 basis points on YoY basis.

The net profit came in at Rs 216.24 for Q3FY14 as against Rs 163.61 crore for Q3FY13 witnessing a gain of 32%. Now let us dig deeper in the results of the company.

Specialty Business

In the specialty business, revenue from India grew by 15% on YoY basis for Q3FY14 to stand at Rs 381 crore. As per ORG IMS Mat Dec 2013, Glenmark Pharmaceuticals (IF) gained 2 ranks from 21st to 19th as compared to MAT Dec 2012 with increase in market share to 2.09 % exhibiting value growth of 15.6 % vis-à-vis IPM growth of 10.06%. The  India  business  strengthened  its  presence  in  following  therapeutic  segments which are cardiac, respiratory, anti-infective, gynaecology, dermatology and anti-diabetic segment.

In the rest of the world the company has witnessed good growth. Revenue from this region came in at Rs 300.96 crore recording an increase of 15%. This is mainly led by the growth in the markets of Russia which increased by 29%. The Africa/Middle East region posted good secondary sales growth in the third quarter. All subsidiaries in the region recorded good growth. The Asia region rebounded strongly and  grew  27  %  in  secondary  sales  for  the  third  quarter.

The Latin American revenue grew by 12.28% on YoY basis to stand at Rs 114 crore.  The Mexico, Venezuela  and  the Caribbean  subsidiary  performed well  recording  good growth, with the Brazil  subsidiary  launching two  new  products  in the  dermatology  range.  The Mexico subsidiary received approval for Generic Seretide.

Glenmark Europe's operations revenue for the third quarter ended Dec 31, 2013 was at Rs 67.84 crore witnessing a growth of 45% on YoY basis for this quarter. As per the management, the growth of Q3FY14 is an outcome of combination of new launches with high effectiveness of sales and marketing activities coupled with disciplined P&L and cash management.

Generics Business

In the US formulations business the company posted revenue of Rs 521.30 crore from sale of finished dosage formulation witnessing a growth of 19.43% on YoY basis. The Company filed three ANDA's with the USFDA taking the total tally for this fiscal year to 12. The company plans to file another 8 to 10 applications in the forthcoming quarter. The Company currently has 59 applications pending in various stages of the approval process with the US FDA, of which 29 are Paragraph IV applications.

The European business continued expanding through product sales and licensing income and by enhancing its presence through distribution partners in European countries. Revenue for the quarter grew by 72% on YoY basis to stand at Rs 68 crore.

Active Pharmaceutical Ingredients (API)

The API business reported a revenue growth of 29% on YoY basis for Q3FY14 to stand at Rs 147.90 crore. The company has reported that the API facility in Ankleshwar has successfully completed a COFEPRIS (Mexico) inspection. At present the company has filed 4 new DMFs in this financial year and acceptable audit status has been maintained for our facilities.
Apart from this the company also has a pipeline of 4 NCE and 3 NBE molecules in clinical trials or ready to enter clinical trials soon, including the in-licensed molecule "Crofelemer".

The results have been good for the company with all the segments performing well along with a robust pipeline of products. We maintain our bullish stance on the counter post the Q3FY14 results.