Leading brokerage house Canara Bank Securities (CanMoney) has picked up Glenmark Pharmaceutical as `value pick`.
It has recommended to `Buy` the stock in Rs 275-277 range for medium term target of Rs 330-335.
Valuations:
``The EPS registered by Glenmark (Q,N,C,F)* for the financial year ending March 2010 was Rs 4.79. Based on the healthy growth projections, on account of good performance by its subsidiaries and better realization from mainline verticals, EPS is likely to be around Rs 5.51 for financial year ending March 2011. Keeping this in view, Glenmark is currently trading at P/E Multiples of 60.26 xs and 52.05xs for FY2010 and FY 2011(E) respectively. Keeping the same P/E guidance, the expected price works out to Rs 332.``
Positive factors for Glenmark:
> Surge in business demand
> Out licensing pharmaceutical and R&D Business
> Better mix of operating verticals
> New growth engines
> Opportunities arising from new US healthcare reform bill
> Strong R&D setup
Negative factors for Glenmark:
Due to the huge capital requirement & lesser chances of success, for any novel drug discovery project, revenue earning chances are always unclear. Some negative factors pertaining to Glenmark are following:
> Total absence in some of the important segments such as multi-vitamins etc.
> Postponing of the IPO of GGL.
> Nill or very less presence in highly lucrative OTC segment.
> PLC, Maturing profile, for various dermatology related drugs in domestic market.
No comments:
Post a Comment