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Check Before You Invest : Glenmark Pharmaceuticals Ltd

BSE: 532296 NSE: GLENMARK ISIN: INE935A01035
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Glenmark Pharmaceuticals Ltd belong to?
Glenmark Pharmaceuticals Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Glenmark Pharmaceuticals Ltd a good quality company?
Glenmark Pharmaceuticals Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Glenmark Pharmaceuticals Ltd undervalued or overvalued?
Glenmark Pharmaceuticals Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 63.31 13.60
Price to Book 6.75 4.50
Price to Sales 4.17 3.06
EV to EBITDA 14.1 12.44
Q.4 Is Glenmark Pharmaceuticals Ltd a good buy now?
Glenmark Pharmaceuticals Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd revenue growth is 12.8% for FY-2025, which is above its 5-year CAGR of 4.6%, indicating faster growth.

Q.2 Gross Profit margin of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.7% for FY-2025, which is above its 5-year median of 7.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.65% for FY-2025, which is in line with its 5-year median of 17.65% indicating stable margins.

Q.4 Net Profit Margin of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Net Profit Margin is 7.86% for FY-2025, is in line with its 5-year median of 7.86%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 7.7 7.1
Operating Profit Margin (%) 17.65 17.65
Net Profit Margin (%) 7.86 7.86

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Return on Asset is 7.42%, which is above its 5-year historical median of 6.74%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Return on capital employed is 16.16% for FY-2025, which is above its 5-year historical median of 14.19%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Return on equity is 12.56% for FY-2025, which is in line with its 5-year historical median of 12.33%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Cash conversion cycle is -25 days, below its 5-year historical median of -21 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.08 1.85
ROE (%) 12.56 12.33
ROCE (%) 16.16 14.19
Cash Conversion Cycle -25 days -21 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Debt-to-Equity ratio is 0.25, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Glenmark Pharmaceuticals Ltd?
Glenmark Pharmaceuticals Ltd Debt to cash flow from operations is -2.65, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Glenmark Pharmaceuticals Ltd?

Q.1 Promoter shareholding and pledge status of Glenmark Pharmaceuticals Ltd?
Promoters hold 46.65% of the Glenmark Pharmaceuticals Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Glenmark Pharmaceuticals Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Glenmark Pharmaceuticals Ltd vs industry peers?
Glenmark Pharmaceuticals Ltd revenue CAGR is 4.60%, compared to the industry median CAGR of 9.13%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 12.8 9.1
Gross Profit Growth (%) 48.7 13.2
Operating Profit Growth (%) 96.7 13.2
Net Profit Growth (%) 0 14.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.08 0.87
ROE (%) 12.56 18.75
ROCE (%) 16.16 20.47
Cash Conversion Cycle (days) -24.61 63

Valuation & price assessment

Q.1 Stock return of Glenmark Pharmaceuticals Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 10.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
10.4% 30.8% 56.6% 62.3%
Q.2 Valuation ratios of Glenmark Pharmaceuticals Ltd vs historical?
The current P/E ratio of 63.31 is higher than its historical median of 13.60, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 63.31 13.60 31.09
Price to Book 6.75 4.50 2.85
Price to Sales 4.17 3.06 2.82
EV to EBITDA 14.1 12.44 15.99

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