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Glenmark Pharma subsidiary listing

November 8, 2007

Divi’s Labs, is a hot favorite for fund managers in Reliance and HDFC Funds. Citigroup and CLSA are optimistic on the performance of Glenmark post separation of specialty and generics business. Glenmark also unveiled a plan to structure its branded & generic businesses as separate entities, with the latter to be listed separately. The restructuring would serve Glenmark well over the long term, given the growing traction & completely diverse natures of the 2 businesses.

Citigroup in its report has raised FY08, FY09 and FY10 base business EPS estimates by 16%, 10% and 15% respectively, as Glenmark raised guidance materially on the back of growing traction in key markets. It has set a new stock target price of Rs 632. Citi expects the EPS to be 21.96 and 25.04 for FY08 and FY09 respectively. CLSA has set a target price of Rs 585 on the Glenmark stock. While DSP Merrill Lynch has a neutral view on the stock.

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