BackGlenmark Q2 profit doubles, beats estimates
Pharmaceutical firm posts `156.75 crore net profit; revenue up almost 19% to `1,255 crore
Premium(A file photo of Glenmark Pharmaceuticals’s plant in Ankleshwar, Gujarat. Analysts say market share gains in US launches will remain the key focus for the firm.)
Mumbai: Glenmark Pharmaceuticals Ltd’s net profit for the September quarter doubled to 156.75 crore, beating estimates, as the drug maker benefited from strong growth in key markets.
“We continue on our high-growth trajectory with both the generics and speciality business registering good growth across geographies. The growth from markets, particularly the US, India and Russia, has been particularly exceptional," chairman and managing director Glenn Saldanha said in a statement on Tuesday.
Revenue rose almost 19% to ₹ 1,255 crore in the quarter.
Glenmark’s generic drug subsidiary in the US, Glenmark Generics Inc., contributed the highest to its revenue and profit during the quarter. Revenue from this business, at ₹ 430.72 crore for the quarter, was up 43.55%. Its European business doubled revenue to ₹ 38.85 crore from ₹ 18.54 crore.
Glenmark’s formulations business in India grew about 35.5% to ₹ 34 crore from ₹ 25.38 crore a year ago. Revenue from Africa, other Asian markets and CIS (Commonwealth of Independent States) that comprises former Soviet states was ₹ 19.4 crore, against ₹ 14.8 crore in the year-ago period, an increase of 31.21%.
The 20% revenue growth in the June quarter was driven by the continued momentum in India, which was up 24% year-on-year, and US generics, up 29%, Monica Joshi of Avendus Securities Pvt. Ltd wrote in an August report. However, other key markets, particularly in the specialty formulation segment, were weak in constant currency terms.
“Glenmark expects momentum in these segments to kick in from the coming quarters. After three quarters of a slide in base margins, the June 2012 quarter marked a recovery for the company," she wrote in the report.
The company added 500 more people to its India sales team this year, and also streamlined the focus on four key categories including dermatology, cardio-metabolics, respiratory and oncology, said an executive from Glenmark who didn’t want to be named.
“In most overseas markets, Glenmark has been focusing on niche products or disease categories that have less competition. This has helped the company gain a bigger market share and high margins. The second quarter’s profit growth is largely on the back of this high-margin business," said a sector analyst with a foreign brokerage who didn’t want to be identified.
Glenmark rose 0.08% to ₹ 395.5 on BSE on Tuesday; the benchmark Sensex shed 1.1% to 18,430.85 points.
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