Glenmark Pharma India and US launches drive next earnings growth phase

Investment View and Growth Drivers

In its August 3, 2026 1QFY27 results update, Motilal Oswal Financial Services reiterated its Buy recommendation on Glenmark Pharma with a target price of Rs 2,570, versus a CMP of Rs 2,230. The broker views India and North America as the principal recovery drivers, supported by new launches, respiratory franchise expansion and pipeline commercialisation.

Motilal Oswal believes Glenmark Pharma has returned to a superior growth path in India following a strategic course correction. US respiratory launches, USFDA compliance and the injectable portfolio from the Monroe site offer additional growth levers.

1QFY27 Financial Performance

Glenmark Pharma reported 1QFY27 revenue of Rs 4,018.5 crore, up 23.1 per cent year on year and broadly in line with Motilal Oswal's estimate of Rs 4,091.9 crore. EBITDA rose 38.6 per cent year on year to Rs 804.8 crore, but was 7 per cent below the broker's estimate. PAT increased 53.8 per cent to Rs 480 crore and was 10 per cent below estimate.

Gross margin improved 10 basis points year on year to 69 per cent, while EBITDA margin expanded 220 basis points to 20 per cent, aided by lower R&D and other expenses as a proportion of sales. Quarterly R&D expense was Rs 250 crore, or 6.2 per cent of sales.

India Formulations and Consumer Care

The domestic formulations business grew 15.5 per cent year on year to Rs 1,432.1 crore, with secondary sales increasing 18.1 per cent versus 12.2 per cent growth in the Indian Pharmaceutical Market. Glenmark Pharma maintained key therapy positions, including number two in dermatology, number three in respiratory and number four in cardiac.

TEVIMBRA and BRUKINSA saw strong uptake, while NEBZMART GFB Smartules and AIRZ FB Smartules supported chronic respiratory growth. Consumer Care primary sales rose 28 per cent to Rs 160 crore, with CANDID growing more than 30 per cent across variants.

Management expects the India business to sustain 12–15 per cent annual growth, supported by approximately 300–400 annual medical-representative additions to its field force of around 5,600. Motilal Oswal forecasts domestic formulations CAGR of 25 per cent over FY26–28.

North America: Respiratory Launches and Injectables

North America revenue increased 41.1 per cent year on year to Rs 1,097.4 crore, including deferred ISB-2001 out-licensing income. Excluding this income, core North America business growth was 19.8 per cent.

Glenmark Pharma launched nine products in the quarter, including generic Flovent HFA 44 mcg with 180-day CGT exclusivity, OTC Fluticasone Nasal Spray, RYALTRIS in the US and re-launched Fulvestrant Injection from Monroe.

Management expects two to three US respiratory approvals in 2HFY27, including Fluticasone 110 mcg, Fluticasone Nasal Spray and RYALTRIS. Fluticasone 44 mcg should receive a full-quarter revenue contribution from 2QFY27. Management expects differentiated injectables to contribute meaningfully from FY28. Motilal Oswal projects North America CAGR of 16 per cent over FY26–28.

Emerging Markets and Europe

Emerging Markets revenue rose 27.7 per cent to Rs 730.4 crore, led by Russia, Latin America, the Middle East and Africa, and Asia Pacific. RYALTRIS maintained leadership in nasal spray markets and is targeted for launch in Brazil in 2HFY27.

Europe revenue grew 11.9 per cent to Rs 747.2 crore, although the broker notes moderation after a revival in 2HFY26. Europe has eight respiratory products commercialised, RYALTRIS is gaining share, and WINLEVI expanded into several European markets. Management expects high single-digit Europe growth in FY27 and a return to double-digit growth from FY28.

Motilal Oswal forecasts Emerging Markets and Europe CAGRs of 13 per cent and 10 per cent, respectively, over FY26–28.

Margins, Estimates and Valuation

Management reiterated FY27 EBITDA margin guidance of 21–22 per cent, expecting India and US growth to offset higher freight and input costs from geopolitical disruptions. It also reiterated R&D investment of 7–8 per cent of sales.

Motilal Oswal reduced its FY27 estimates by 2.5 per cent to reflect raw-material price hikes and higher R&D and marketing spending. The broker forecasts PAT of Rs 2,120 crore in FY27 and Rs 2,500 crore in FY28, versus Rs 570 crore in FY26.

The Rs 2,570 target price is based on 25 times 12-month forward earnings plus Rs 290 of NPV for ISB-2001.

Key Risks to the Thesis

• Elevated input and freight costs.
• Higher R&D and marketing expenditure.
• Weaker-than-expected recovery in European growth.