This post on Glenmark Life Sciences IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Glenmark Life Sciences IPO or not.
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Glenmark Life Sciences IPO: Grey Market Premium etc.
- 27-07-21 GMP 125
Subscription: Glenmark Life Sciences IPO ( x times)
|Day / X times||QIB||NII||Retail||Total|
|Total Retail Applications||~ 3950392|
|Appl wise Retail||10.74 x|
Consolidated Brokerage Views on Glenmark Life Sciences IPO
Ashika :”Subscribe: GLS has a good performance execution and clean regulatory track record. Given the healthy growth prospects, leading manufacturer of select high value non-commoditised APIs in chronic therapies, expanding manufacturing facility, expanding R&D infrastructure, servicing new markets, explore new product, strong
financials, healthy balance sheet and strong promoter backing with synergies augur well for the company’s performance going forward. Hence, it is recommended to “SUBSCRIBE” the issue.”
Capital Market : ” Score 48/100 ; The annualized EPS on post-issue equity works out to R 28.70 for FY2021. At the price band of R 695 to R 720, P/E works out to 24.21 atthe lower band and 25.08 for the upper band for FY2021. In terms of P/E ratio, its other listed peers are: Divis Laboratories has P/E of 65.48, Laurus Labs has P/E of 36, Shilpa Medicare has P/E of 36.32, Aarti Drugs has P/E of 24.13 and Solara Active Pharma Sciences has P/E of 26.66. FY21 annualized EPS is used in the calculations above with share price being used as of date 26th July 2021.”
Dolat Capital: “GLS’ FY21 P&L reflects benefits from Favipiravir (EBITDA margin 31%). Interestingly in past 6 months (Jan-Jun’21), exports have largely been
towards EM and sales have seen a declining trend. Also, Glenmark’s contribution has been negligible during this period. We expect revenue contribution from newly-commercialized products to increase over the next five years. In addition, we see the complex API business as a key growth opportunity where GLS could leverage expertise in synthetic chemistry and analytical characterization to expand its existing technology platforms and complex API portfolio in oncology, peptides and
iron compounds, thereby expanding existing portfolio of API products. Profit share clause in the CDMO segment could add profit optionality to this business. At the upper end of price band of Rs720, Glenmark is valued currently at 22x FY21 earnings which is in-line with industry peers. Subscribe”
Choice Broking: “At higher price band of Rs. 720, GLS is demanding a P/E valuation of 25.1x (to its restated FY21 EPS of Rs. 28.7), which is at
discount to the peer average of 37.5x. However, based on the forecasted FY24E earnings, the demanded valuation comes
out to be 11.4x, which seems to be attractive for a company generating a RoE of around 20%. Thus, considering the business
growth outlook and almost stable operating margins, we assign a “SUBSCRIBE” rating for the issue.”
ICICI Securities Limited: “GLS has a good performance execution and clean regulatory track record. The company is also a leading developer and manufacturer of select high value, non-commoditised APIs in chronic therapies and works with 16 of the 20 largest generic companies globally. The growth momentum also has a
strong undercurrent of global API industry growth. We recommend SUBSCRIBE to the issue.”
Nirmal Bang : “The company has grown at a CAGR of 16% over FY18-21. Due to favorable product mix and overall control on costs., EBITDA grew at higher CAGR of 21% over same period. EBITDA margins improved from 27.6% in FY18 to 31.4% in FY21. The management believes that there is no one-off in these margins, and with increasing share of CDMO business (has higher margins), margins are likely to remain healthy in future as well. At upper band of Rs 720, the PE comes to 25.1x FY21 earnings, which looks attractive. We recommend “Subscribe”.
Prabhudas Lilladher: :”Glenmark Life has strong track record of manufacturing APIs mainly for in-house requirements of Glenmark’s expansion of generic formulations in US. As the API division receives better traction and favourable incentive schemes, Glenmark Life aims to expand its global footprint in complex molecules and CDMO
business. At upper price band, company is attractively valued at 22.1x FY21 PER with better financial performance, in comparison to its peers. Recommend SUBSCRIBE’ for long term gains.”
SMC: “Score 3/5 ; Glenmark Life Sciences Limited is the leading manufacturer of Active Pharmaceutical Ingredients (APIs). It has generated strong revenue and margin growth in the last 3 years. The company has planned to use the proceeds towards funding the capital expenditure requirements and general corporate purposes. Moreover, the company intends to increase its API manufacturing capabilities at Ankleshwar facility during FY22, and Dahej facility during FY22 and FY23 by an aggregate annual total installed capacity of 200 KL. This additional production capacity is expected to help the company further expand generic API productionand also grow oncology product pipeline. Along term investor my opt the issue.”
SP Tulsiyan Website: “Lower interest outgo in the immediate future, makes IPO pricing inexpensive and attractive for listing gains. Over the long term, presence in high-margin non-commoditized verticals and rising capacity keeps prospects bright. Thus, company looks good both for listing gains as well as a portfolio play.“
Ventura :”We initiate coverage with a SUBSCRIBE for long term investing. Our target price of INR 1,039 (18X FY24 earnings) represents a potential upside of 44% from the offer price of INR 720 over a period of 18-24 months. The business environment, futuristic product portfolio, success in new product development and planned capacity expansions bolster our confidence in sustaining growth, margins and return ratios over the forecast period.”
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.