GLENMARK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | GLENMARK | Market Cap | 63,723 Cr. | Current Price | 2,255 ₹ | High / Low | 2,474 ₹ |
| Stock P/E | 43.0 | Book Value | 848 ₹ | Dividend Yield | 0.11 % | ROCE | 9.72 % |
| ROE | 7.35 % | Face Value | 1.00 ₹ | DMA 50 | 2,256 ₹ | DMA 200 | 2,039 ₹ |
| Chg in FII Hold | 1.15 % | Chg in DII Hold | -0.81 % | PAT Qtr | 426 Cr. | PAT Prev Qtr | 193 Cr. |
| RSI | 44.7 | MACD | 25.8 | Volume | 16,67,322 | Avg Vol 1Wk | 8,78,695 |
| Low price | 1,370 ₹ | High price | 2,474 ₹ | PEG Ratio | 21.5 | Debt to equity | 0.02 |
| 52w Index | 80.1 % | Qtr Profit Var | 3.00 % | EPS | 0.74 ₹ | Industry PE | 30.5 |
📊 Financials: Glenmark Pharma shows mixed fundamentals. Quarterly PAT rose from ₹193 Cr. to ₹426 Cr., but EPS remains low at ₹0.74, reflecting margin pressures. Debt-to-equity is minimal at 0.02, ensuring low leverage risk. ROE at 7.35% and ROCE at 9.72% are weak compared to industry peers, indicating modest capital efficiency. Cash flows are stable but profitability remains inconsistent.
💹 Valuation: The stock trades at a P/E of 43.0, above the industry average of 30.5, suggesting premium valuation despite weaker returns. P/B ratio is ~2.66 (Price ₹2255 / Book Value ₹848), which is reasonable. PEG ratio of 21.5 indicates stretched growth-adjusted valuation. Intrinsic value analysis suggests the stock is overvalued at current levels given modest efficiency metrics.
🏢 Business Model: Glenmark operates in the pharmaceutical sector with a focus on generics, specialty drugs, and APIs. Its competitive advantage lies in diversified product offerings and global presence. However, profitability pressures and high competition in generics limit margin expansion.
📈 Entry Zone: With DMA 50 at ₹2256 and DMA 200 at ₹2039, the stock is trading near its short-term average. RSI at 44.7 indicates neutral momentum, while MACD at 25.8 suggests mild bullishness. Accumulation near ₹2000–₹2100 would be a more favorable entry zone for long-term investors.
Positive
- 🚀 Strong quarterly PAT growth (₹426 Cr. vs ₹193 Cr.).
- 💰 Minimal debt-to-equity ratio of 0.02 ensures stability.
- 📈 Reasonable P/B ratio (~2.66) compared to peers.
- 🌍 Diversified global presence in generics and APIs.
Limitation
- ⚠️ Weak ROE (7.35%) and ROCE (9.72%).
- 📉 EPS at ₹0.74 reflects margin pressures.
- 🔄 PEG ratio of 21.5 indicates stretched valuation.
Company Negative News
- ⚠️ No major recent negative news, though profitability remains under pressure.
Company Positive News
- ✅ Strong quarterly profit growth despite industry challenges.
- 📈 Increase in FII holdings (+1.15%) indicates institutional confidence.
Industry
- 💊 Pharmaceutical industry benefits from global demand and regulatory-driven barriers.
- 📊 Industry P/E at 30.5 reflects optimism and growth potential.
- 🌍 High competition in generics impacts margins across the sector.
Conclusion
Glenmark Pharma shows strong profit growth but weak efficiency metrics, with ROE and ROCE below industry standards. Valuations are stretched on P/E and PEG, making current levels less attractive. Entry around ₹2000–₹2100 is favorable, and long-term holding is recommended only for investors seeking exposure to a diversified pharma company with global reach, while accepting margin volatility.
Would you like me to extend this with a peer comparison against other pharma companies or a intrinsic value analysis using discounted cash flow?