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GLENMARK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | GLENMARK | Market Cap | 54,720 Cr. | Current Price | 1,940 ₹ | High / Low | 2,286 ₹ |
| Stock P/E | 36.9 | Book Value | 848 ₹ | Dividend Yield | 0.13 % | ROCE | 9.72 % |
| ROE | 7.35 % | Face Value | 1.00 ₹ | DMA 50 | 1,981 ₹ | DMA 200 | 1,856 ₹ |
| Chg in FII Hold | -1.53 % | Chg in DII Hold | 1.48 % | PAT Qtr | 426 Cr. | PAT Prev Qtr | 193 Cr. |
| RSI | 42.6 | MACD | -5.09 | Volume | 3,90,883 | Avg Vol 1Wk | 4,29,376 |
| Low price | 1,275 ₹ | High price | 2,286 ₹ | PEG Ratio | 18.4 | Debt to equity | 0.02 |
| 52w Index | 65.8 % | Qtr Profit Var | 3.00 % | EPS | 0.74 ₹ | Industry PE | 29.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT rose from 193 Cr. to 426 Cr., but YoY profit variation is modest at 3.0%, indicating uneven growth.
- Margins: ROE at 7.35% and ROCE at 9.72% reflect weak profitability compared to industry peers.
- Debt Ratios: Debt-to-equity at 0.02 shows a nearly debt-free balance sheet.
- Cash Flows: Stable but limited efficiency due to low return metrics.
- Return Metrics: EPS at 0.74 ₹ is significantly low relative to price, highlighting valuation concerns.
💹 Valuation Indicators
- P/E Ratio: 36.9, higher than industry PE of 29.0, suggesting overvaluation.
- P/B Ratio: ~2.3 (Current Price / Book Value), reasonable but not cheap.
- PEG Ratio: 18.4, extremely high, indicating poor growth-adjusted valuation.
- Intrinsic Value: Current price (1,940 ₹) appears expensive relative to earnings power; upside potential limited unless profitability improves.
🏢 Business Model & Competitive Advantage
- Operates in pharmaceuticals with focus on generics and specialty drugs.
- Competitive advantage lies in diversified product portfolio and global presence.
- Challenges include margin pressure and relatively weak return ratios compared to peers.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Safer accumulation range between 1,750 ₹ – 1,850 ₹ (near DMA 200).
- Long-Term Holding: Suitable only for investors with higher risk appetite; improvement in profitability is key for sustained returns.
Positive
- Debt-light balance sheet.
- Strong quarterly PAT jump compared to previous quarter.
- DII inflows (+1.48%) show domestic confidence.
Limitation
- Low ROE and ROCE compared to industry standards.
- Extremely high PEG ratio signals poor growth-adjusted valuation.
- Dividend yield at 0.13% is negligible.
Company Negative News
- Reduction in FII holdings (-1.53%) indicates foreign investor caution.
Company Positive News
- Quarterly PAT more than doubled sequentially, showing operational improvement.
- Strong domestic institutional support with rising DII holdings.
Industry
- Pharmaceutical sector remains resilient with steady demand for generics and specialty drugs.
- Industry PE at 29.0 reflects moderate investor optimism.
Conclusion
- Glenmark shows mixed fundamentals: debt-light structure and sequential profit growth, but weak return ratios and expensive valuation.
- Stock is best approached cautiously, with entry near support levels.
- Long-term holding depends on improvement in profitability and margin expansion.
I can also prepare a peer comparison with companies like Lupin or Cipla to highlight Glenmark’s relative strengths and weaknesses if you’d like.