Kotak starts coverage of India's Glenmark Life Sciences with "buy"

Alivus Life Sciences

13/04/2023 07:01

** Kotak Institutional Equities initiates coverage of
Glenmark Pharmaceuticals  GLEN.NS -owned Glenmark Life Sciences
 GLEM.NS  with "buy" rating at a PT of 500 rupees
    ** GLEM's relative resilience is captured in its
outperformance over the past two years, which have been tough
for the entire Indian API industry, the brokerage says in note
        ** Kotak rates "buy" - its highest rating - when it
expects a co to deliver more than 15% returns over the next 12
months
  
    ** Says co's steady pace on new launches and client wins
will help sustain growth
    ** Despite dwindling sales contribution from parent GLEN -
which remains its largest client - co has outperformed growth of
its generic API peers by 350 bps over fiscal 2023 - Kotak
    ** Expects co to deliver healthy 10.5%, 7.9% and 8.7%
revenue, EBITDA and PAT CAGRs, respectively, over FY2023-26E,
driven by a ramp-up of the generic API segment
    ** Says key risks for co include GLEN's cash flow woes,
lower degree of backward integration, near-zero hedging policy
and high spot sales
    ** GLEM last up 1.43%
    

 (Reporting by Aleef Jahan in Bengaluru)
 ((aleefjahan.cs@thomsonreuters.com))