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Glenmark profits grow 56.21% but shares continue to tumble

Glenmark profits grow 56.21% but shares continue to tumble
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First Published: Mon, Oct 27 2008. 09 13 PM IST

Good performance: Glenmark Pharmaceuticals Ltd CEO and MD Glenn Saldanha. He said the company’s specialty and Indian formulations businesses continue to register steady growth. Ramesh Pathania / Mint
Good performance: Glenmark Pharmaceuticals Ltd CEO and MD Glenn Saldanha. He said the company’s specialty and Indian formulations businesses continue to register steady growth. Ramesh Pathania / Mint
Updated: Mon, Oct 27 2008. 09 13 PM IST
Mumbai: Drug maker Glenmark Pharmaceuticals Ltd on Monday posted a net profit of Rs117.36 crore for the three months to September, up 56.21% against the corresponding period a year ago.
The company’s stock, however, continued to be hammered on the bourses. On Monday, it fell some 20% on the Bombay Stock Exchange to close the day at Rs259.25, on a day the benchmark index, Sensex, fell 2.2%.
Good performance: Glenmark Pharmaceuticals Ltd CEO and MD Glenn Saldanha. He said the company’s specialty and Indian formulations businesses continue to register steady growth. Ramesh Pathania / Mint
Since Friday last week, the company’s share prices have declined 35.99%, on the back of news that Eli Lilly and Co., the Mumbai-based drug formulations maker’s US research and development partner, stopped trials of a key pain management molecule.
For the quarter ending 30 September, Glenmark’s revenues grew 49.30% to Rs559.71 crore, from Rs374.89 crore in the corresponding period last year. The company also said it earned Rs49 crore on foreign currency fluctuations. Revenue from the generic drugs business stood at Rs247.5 crore for the second quarter of the fiscal year that began in April, up 85.77% from a year earlier. The specialty or branded drugs sales grew 29.19% to Rs312.2 crore.
Chief executive and managing director Glenn Saldanha said profits were up during the quarter due to significant growth in domestic and international markets.
“All our business units have performed well with strong growth recorded by the generics business, especially the US arm,” he said. “The specialty business (and) the Indian formulations business continue to register steady growth and the introduction of new products will further boost sales for this business. On the discovery front, too, we have made progress with another two molecules entering the clinical trial stage.”
Kirit Gogri, a sector analyst with Mumbai-based equity research firm Quant Capital, said Glenmark is valued on the drug discovery front more than its generic and specialty businesses.
“So, the investor outlook on the shares, which was impacted after the Eli Lilly setback last week, will remain negative for a while,” Gogri said.
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First Published: Mon, Oct 27 2008. 09 13 PM IST