Glenmark Life Sciences reports muted margins in Q4GLS - 645 Change: 18.80 (3.00 %)
News: Glenmark Life Sciences' (GLS) Q4FY22 revenues grew 10% YoY to Rs 514 crore. Revenues from Generic API grew 12.5% YoY to Rs 459 crore while CDMO business de-grew 20.6% YoY to Rs 435 crore. EBITDA margins contracted 770 bps YoY to 28.7% mainly due to lower gross profit margins (50.4% in Q4FY22 vs 58.8% in Q4FY21) and higher other expenditure. EBITDA declined 13.5% YoY to Rs 147 crore. Net profit de-grew 5.5% YoY to Rs 989 crore. Delta vis-à-vis EBITDA is on account of lower interest cost. Glenmark Life has recommended final dividend of Rs 10.5 per equity share, which takes the total dividend for FY22 to Rs 21 per equity share.
Views: Due to a challenging business environment, particularly as expected on margins front due to higher input, freight and power cost, the margin performance was weak while revenues largely remained steady. GLS is on a significant capacity augmentation journey with guided capacity in FY23E and FY26E is likely to be 1.8x and 2.8x levels of FY22 levels. Glenmark Life estimated contribution to Glenmark Pharma for Q4FY22 - 17% to revenue, 24% to EBITDA and 33% to PAT in Q4FY22. GLS focus on key chronic therapeutic mix and regulated geography bodes well with likely new growth levers in oncology, iron compounds and ramp up in CDMO portfolio. [Note: GLS contribution numbers to Glenmark Pharma are inclusive of internal sales].