Mehabe score: 3 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Glenmark Life Sciences, a subsidiary of Glenmark Pharmaceuticals Ltd, is one of the leading developers and manufacturers of select high-value Active Pharmaceutical Ingredients. The company further operates in Contract Development and manufacturing operations to offer services to specialty Pharmaceutical companies.[1] Site:GLS Main Symbol:GLS
Stock trades at 489.0, below its 50dma 501.71 and below its 200dma 595.35. The stock remains bearish on technicals
The 52 week high is at 799.95 and the 52week low is at 376.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 68.88%
Weakness
– Stock is trading at 7.96 times its book value
Competition
– The industry trades at a mean P/E of 27.5x. Biocon trades at the industry’s max P/E of 60.35x. GLS trades at a P/E of 14.3x
– Industry’s mean G-Factor is 2.1 while the mean Piotski score is 9.0. GLS has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 2.3%. The max 1- month return was given by Dr Reddy’s Labs: a return of 7.2 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 514.0 cr compared to Rs 467.0 cr for period ended Mar 2021, a rise of 10.1% .
vis-vis 170.0 for period ended Mar 2021 .
Operating Margins contracted -877.6 bps for period ended Mar 2022 vis-vis Mar 2021.
Company reported operating profit of Rs 142.0 cr for period ended Mar 2022 and operating profit margin at 27.6 % for same period.
The EPS for quarter ended Mar 2022 is Rs 8.07 compared to Rs 8.46 for previous quarter ended Dec 2021 and Rs 106.81 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2123.0 cr for period ended Mar 2022 vis-vis sales of Rs 1885.0 cr for the period ended Mar 2021, a healthy growth of 11.2%. The 3 year sales cagr stood at 33.8%.
Operating margins shrank to 29.0% for period ended Mar 2022 vis-vis 31.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 419.0 cr for period ended Mar 2022 vis-vis sales of Rs 352.0 cr for the period ended Mar 2021, rising 16.0%.
Company recorded a healthy Net Profit CAGR of 28.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 56.0% compared to 69.0% over the last 3 Years. – The stock has given a return of % on a 1 Year basis vis-vis a return of % over the last 3 Years. – The compounded sales growth on a TTM bassis is 13% vis-vis a compounded sales growth of 34% over the last 3 Years. – The compounded profit growth on a TTM basis is 19% vis-vis a compounded profit growth of 29% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2022 fii holding stood at 8.12% vis-vis 8.32% for Dec 2021 – Public shareholding has remained largely constant. The Mar 2022 public holding stood at 8.47% vis-vis 8.36% for Dec 2021
Conclusion
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 68.88% – Stock is trading at 7.96 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains below its 50 DMA 501.71 and is trading at 489.0. Shows a near term lack of buying interest.
