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Key Business Highlights
Total revenue for the FY21 increased by 21.73% to Rs 1885.98 crore as against Rs 1549.31 crore in FY20 due to increase in sales. Glenmark Life sciences posted PAT of Rs 351.58 crore, an increase of 12.3% from the previous financial year. Profitability margins have been strong and stable throughout the three fiscals. Net margin has fallen slightly to 18.64% in FY21 from 20% during the last two fiscals.
Debt to equity ratio is 1.27x as on 31st March 2021. Return on net worth is 46.71% for fiscal 2021.
Particulars | FY21 | FY20 | FY19 |
Total Revenue | 1885.98 | 1549.31 | 1405.49 |
PAT | 351.58 | 313.10 | 292.67 |
EBITDA | 591.88 | 483.96 | 429.27 |
Total Assets | 1997.08 | 1725.6 | 1475.4 |
EBITDA Margin | 31.38% | 31.24% | 31.24% |
Net Margin | 31.24% | 20.21% | 20.82% |
With EPS of 32.61 as on 31st March 2021, the Issue is valued at 22.08x calculated at the upper price band of Rs 720 per share. The Issue price is 10.31 times of NAV of 69.82 per share. Average P/E of the sector is 36.74x. Hence, the Issue appears to be reasonably priced.
As per the RHP, peers of the issuer are Divis Lab, Lauras Lab, Shilpa Medicare, Aarti Drugs and Solara Active Parma Sciences. The key details of the peers can be seen in the peer comparison table.
Particulars | Divis Lab | Lauras Lab | Shilpa Medicare | Aarti Drugs | Solara Active pharma | Glenmark Life Sciences |
Face Value per share | 2 | 2 | 1 | 10 | 10 | 2 |
Total Income for FY21 (INR Crores) | 7031.96 | 4835.9 | 931.3 | 2159.3 | 1645.7 | 1886.0 |
EPS | 74.75 | 18.36 | 18.13 | 30.09 | 69 | 32.61 |
NAV per share | 350.12 | 48.41 | 181.37 | 98.01 | 442.12 | 69.82 |
Return on net worth | 21.35% | 37.87% | 9.99% | 30.70% | 13.93% | 46.71% |
P/E | 63.65 | 36.59 | 33.37 | 24.28 | 25.83 | 10.31 |
Glenmark Life Sciences has a niche and specialized product portfolio with its reach expanding into new geographies. The Issuer has maintained high customer loyalty with a high rate of customer retention.
The Issuer has a good track record of financial performance with strong profitability margins and growth in its topline. Glenmark Life has plans to expand the API portfolio and grow its CDMO business through expanding production capacities in the future. The Issue is reasonably priced in terms of price to its earnings ratio when compared to its peers. Hence, investors may subscribe to the IPO.
Review By CA Priyanka Choudhary on 3rd Jul 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.