Glenmark Pharmaceuticals’ March quarter (Q4FY26) results missed expectations even as Ebitda increased 36% year-on-year to ₹763 crore, aided by slower growth in raw material costs and other expenses. Ebitda margin expanded 300 basis points to 20.2%. The stock is down about 4% over the past two trading sessions following the company’s results.
For perspective, Motilal Oswal Financial Services was expecting Glenmark’s Ebitda at ₹823 crore and margin at 21.6%, though revenue was in line with its estimates. Glenmark’s revenue increased by 16% to ₹3,771 crore in Q4FY26.
The India business is the biggest contributor to Glenmark’s revenues, accounting for 27% of total Q4 revenue. India revenue grew at a modest 8.2% due to subdued traction in the diabetes portfolio. The company launched semaglutide brand Glipiq in India in vials and pre-filled pens, which should improve traction in the diabetes segment from Q1FY27.
North America contributed 24.8% of Glenmark’s Q4FY26 revenue and reported 29.4% growth. But there’s a catch. Reported revenues included deferred out-licensing income recognition from Glenmark’s AbbVie deal for ISB-2001. Excluding this, North America revenue was up just 7.8%.
Europe and emerging markets, contributing about 24% of revenue each in Q4FY26, had some bright spots. Europe revenue grew 21.4%, led by higher-margin branded products. Allergy treatment Ryaltris continued gaining market share in all the countries where it was launched. Acne treatment Winlevi gained traction in the UK after its launch in Q1FY26.
Emerging markets revenue grew 13.7%. Respiratory product launches in FY26 aided performance in this area in the region. Ryaltris remained a key growth driver and was launched in China and Thailand last quarter. Outperformance in Malaysia, Australia and Sri Lanka aided overall growth.
Focus on execution
Meanwhile, investors’ focus is now shifting from licensing income to execution. Glenmark’s management has guided for FY27 revenue at ₹17,000-18,000 crore. FY26 reported revenue was ₹16,983 crore and core revenue was ₹13,000 crore. Management expects FY27 Ebitda margin at 21-22%.
The US business could be a key growth driver in FY27 as Flovent, launched towards the end of Q4FY26, could contribute meaningfully. Also, the resumption of commercial manufacturing at the Monroe facility after a favourable USFDA classification could support growth.
Ryaltris is another important growth engine. The allergy treatment generated annualised sales of around $100 million in FY26, clocking over 50% growth in global secondary sales. Management expects the brand to grow 30-40% annually over the next few years.
It also expects the India business to grow more than 15% in FY27, supported by continued momentum in dermatology, respiratory and cardiac therapies; higher contribution from oncology brands Tevimbra and Brukinsa; and the recently launched Glipiq. Note that India revenue had declined 17% in FY26.
Motilal’s analysts expect considerable growth in Glenmark’s financial performance over FY26-28. The stock has gained about 45% over the past year. The AbbVie licensing deal for ISB-2001 validated Glenmark’s innovation pipeline and strengthened its balance sheet, helping to achieve its guidance of becoming gross-debt-free by the end of FY26. Its cash position stood at ₹1,200 crore.
Glenmark’s shares trade at 22 times estimated FY28 earnings, based on Bloomberg consensus. While this valuation seems undemanding, investors are waiting for stronger growth from core businesses rather than one-off licensing gains. “Enhanced free-cash generation and maintaining a prudent balance sheet are essential avenues to watch in the quarters ahead,” said ICICI Securities.