Glenmark Pharma hits 52-week low on subdued Q4 results

Shares of Glenmark Pharmaceuticals hit a fresh 52-week low of Rs 484 per share, slipping 9% on the BSE in early morning trade, after the company reported a decline of 17% in its consolidated net profit at Rs 1.52 billion for the quarter ended March 2018 (Q4FY18), on account of de-growth in US business. The drug company had profit of Rs 1.84 billion in the same quarter last fiscal.
On the National Stock Exchange (NSE), the stock was down 5% to Rs 506 in intra-day trade.

The company’s consolidated revenue during the quarter under review decreased by 7% to Rs 22.80 billion against Rs 24.57 billion in the corresponding quarter of previous year. US revenue declined 30% to Rs 7 billion from Rs 10 billion in previous year quarter.

Earnings before interest, taxation, depreciation and amortization (ebitda) margin stood at 17.4% from 15.97% in a year ago quarter.

“While FY2018 was a challenging year mainly on account of pricing pressure in the U.S., our other key markets like Europe and India performed well on the back of new product launches. Even though we expect pricing pressure to persist, we are glad that FY2019 has started on a positive note for us with approvals for some interesting products in the U.S.,” said Glenn Saldanha, chairman & managing director, Glenmark Pharmaceuticals.

Top stocks to buy today: Glenmark and Infosys

NIFTY OUTLOOK - Nifty has finally reversed after having fallen for 8 consecutive days. It has strongly closed in the positive territory from quite an oversold territory; hence a further bounce can’t be ruled out. The recent decline is the first leg of the downside that has started from 10920 levels.

Buy GLENMARK
Target: Rs 570
Stop Loss: Rs 507
Glenmark Pharma has reversed well from the lower end of the falling channel and the momentum indicators too have provided a positive buy crossover which is quite positive for the short term. The minimum retracement target on the upside comes to 570; one can buy this with a stop loss of 507.

Buy INFOSYS
Target: Rs 1,270
Stop Loss: Rs 1,186
Infosys has provided a good breakout from an ascending triangular pattern with an increase in volumes and a buy crossover in its momentum indicators. The stock is forming higher tops and bottoms and it has been trading well in an upward sloping parallel channel, hence the probability of it reaching the upper end of the channel is quite high. SO, we recommend to buy Infosys for the target of 1270 with a stop loss of 1186.

Glenmark Pharma falls 3% as Baddi unit gets 7 observations from USFDA

Glenmark Pharmaceuticals dipped 3% to Rs 574 on the BSE in intra-day trade after the company said its Baddi unit gets seven observations from US health regulator.

“The US Food and Drug Administration (USFDA) issued seven observations through the form 483,” Glenmark Pharmaceuticals said in a regulatory filing.

The Baddi unit of Glenmark Pharmaceuticals underwent an US FDA audit from November 6, 2017 to November 11, 2017. The Baddi unit contributes approximately 10% of the revenue of US sales.

“We are in the midst of providing a comprehensive response to the observations and would be replying to the FDA shortly on the observations,” the company said.

Since November 2, post September quarter (Q2FY18) results, the stock of Glenmark Pharma was under pressure, falling 13% and hit a 52-week low of Rs 565 on November 16, 2017 in intra-day trade.

The company  reported a 4.2% year-on-year (YoY) drop in Q2FY18 consolidated net profit to Rs 214 crore on weak US sales. Consolidated revenue grew 1.5% YoY to Rs 2,257 crore during the quarter. In US, the biggest market for the company, sales fell 5.7% on year to Rs 727 crore because of the persisting price erosion in older products.

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