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Kotak Securities puts BUY on Glenmark Pharma

Kotak Securities puts BUY on Glenmark Pharma
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First Published: Fri, Jul 04 2008. 11 22 AM IST
Updated: Fri, Jul 04 2008. 11 22 AM IST
Glenmark has acquired seven brands from Actavis in Poland for an undisclosed amount. The acquisition is aimed at tapping Central and Eastern European markets since Poland is the largest market in that part of the world.
The company expects $15 million in revenues from acquired brands in FY09. Revenues from Europe in FY09 are pegged at $20 million.
We expect fully diluted EPS of Rs.31.5 and Rs.42.5 for FY09 and FY10, respectively assuming $69 million income from NCE out-licensing each in FY09 and FY10, respectively.
The EPS from core business is expected to be Rs.23.9 in FY09 and Rs.34.9 in FY10. At current market price Rs.605, the stock is trading at 19.2x FY09 and 14.2x FY10 fully diluted earning estimates.
We have valued the core business (excluding R&D income) at Rs523 attaching 15x PE multiple to FY10 fully diluted earning and an option value IP Assets at Rs268 (GRC 3886 at Rs117, GRC 8200 at Rs48, and GRC 6211 at Rs103). We recommend a BUY in this counter with a target price of Rs791.
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First Published: Fri, Jul 04 2008. 11 22 AM IST
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