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Glenmark Pharma – ABN Amro

May 3, 2007

ABN Amro research has put a HOLD on Glenmark Pharma. Glenmark’s Q4 results were in expectations but thinks the FY08 guidance as aggressive.

ABN Amro says the stock is fairly valued and stocks to a price target of Rs 656. Glenmark is expected to report an EPS of Rs 29.3 for FY08 and Rs 37.3 for FY09. Glenmark derives 40% of its income from India.

Glenmark has gudied for 80% increase in revenue growth from the US market for FY08. This seems too ambitious with the recent erosion of prices in the US generics market. Glenmark has been into the US for little over a year and adding to its woes is the appreciation of Indian Rupee against USD.

ABN Amro has raised its SOTP based target price from Rs 603 to 656. The stocks is fairly valued at 18x core earnings with a valuation of USD 1 Billion for out licensing deals.

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