Glenmark Pharmaceuticals demonstrates fast growth
15-05-2014 • About Glenmark Pharmaceuticals (
$GLENMARK) • By InTwits
Glenmark Pharmaceuticals is an attractive growth stock in Pharmaceuticals industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Glenmark Pharmaceuticals showed fast growth in the last financial year. The company's revenue surged on 19.8% in FY2014. The growth also happened in EBITDA of 4.95% for the same period.
If we look for the longer period Glenmark Pharmaceuticals showed fast revenue growth of 26.7% from FY2011 to FY2014 annually. EBITDA surged on 22.9% from FY2011 to FY2014 annually.
Glenmark Pharmaceuticals ($GLENMARK) financials for the last 5 years
mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Revenue | 81,967 | 29,491 | 40,206 | 50,123 | 60,052 |
---|
Revenue growth, % | | -64.0% | 36.3% | 24.7% | 19.8% |
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Gross margin, % | 59.2% | | | | |
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SG&A, % | 31.4% | | | | |
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EBITDA | 6,732 | 5,923 | 7,143 | 10,485 | 11,004 |
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EBITDA growth, % | | -12.0% | 20.6% | 46.8% | 4.9% |
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EBITDA margin, % | 8.21% | 20.1% | 17.8% | 20.9% | 18.3% |
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Net Income | 3,245 | 4,532 | 4,603 | 6,200 | 5,423 |
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Net Income margin, % | 3.96% | 15.4% | 11.4% | 12.4% | 9.03% |
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|
CAPEX | 3,958 | 4,012 | 2,854 | 4,710 | 3,766 |
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CAPEX/Revenue, % | 4.83% | 13.6% | 7.10% | 9.40% | 6.27% |
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Debt | 19,515 | 21,116 | 22,445 | 27,649 | 32,670 |
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Cash | 1,013 | 1,949 | 3,201 | 6,052 | 7,948 |
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Net Debt/EBITDA | 2.7x | 3.2x | 2.7x | 2.1x | 2.2x |
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|
ROIC, % | 13.5% | 11.7% | 14.4% | 17.7% | 13.8% |
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ROE, % | 16.4% | 20.6% | 20.7% | 24.0% | 18.9% |
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Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the longer period Glenmark Pharmaceuticals's EBITDA margin decreased on 1.80 pp from 20.1% in FY2011 to 18.3% in FY2014.
We call Glenmark Pharmaceuticals an attractive growth stock as together with the growth it delivers high ROIC at 13.8%. Three years ago it was a bit lower at 11.7%. It's average ROIC for the last three years was 15.3%.
Glenmark Pharmaceuticals showed big decline in Net Income margin of 3.40 pp from 12.4% to 9% in FY2014. If we look for the longer period Net Income margin dropped on 6.40 pp from 15.4% in FY2011 to 9% in FY2014.
Glenmark Pharmaceuticals operates at ROE of 18.9%. It's average ROE for the last three years was 21.2%.
Capital expenditures (CAPEX)
To this fast growth Glenmark Pharmaceuticals had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 6.27%. Glenmark Pharmaceuticals's CAPEX/Revenue dropped on 7.33 pp from 13.6% in FY2011 to 6.27% in FY2014. It's average CAPEX/Revenue for the last three years was 7.59%.
Leverage (Debt)
The company has medium debt level at 2.2x Net Debt/EBITDA to maintain high growth. If we look for the longer period the company's leverage dropped on 0.99x from 3.24x in FY2011 to 2.25x in FY2014.
Peers in Pharmaceuticals
Below you can find Glenmark Pharmaceuticals benchmarking vs. other companies in Pharmaceuticals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Granules India ($GRANULES) | | -68.4% | 37.6% | 16.9% | 43.4% |
Alembic Pharmaceuticals ($APLLTD) | | -52.0% | 22.0% | 3.7% | 22.6% |
Rpg Life Sciences ($RPGLIFE) | | -31.7% | 3.2% | 14.9% | 6.3% |
Sanjivani Paranteral ($SANJIVIN) | | | | 1.2% | 5.8% |
|
---|
Median (4 companies) | | -52.0% | 22.0% | 9.3% | 14.4% |
---|
Glenmark Pharmaceuticals ($GLENMARK) | | -64.0% | 36.3% | 24.7% | 19.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Omega Laboratories ($OMEGALAB) | | | 0.0% | 0.0% | 0.0% |
|
---|
Median (1 company) | | | 0.0% | 0.0% | 0.0% |
---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Alembic Pharmaceuticals ($APLLTD) | | 13.4% | 15.4% | 16.4% | 19.2% |
Granules India ($GRANULES) | 4.1% | 13.7% | 13.5% | 12.8% | 14.5% |
Sanjivani Paranteral ($SANJIVIN) | | | 8.8% | 8.3% | 7.5% |
Rpg Life Sciences ($RPGLIFE) | 11.6% | 17.6% | 9.6% | 7.3% | 5.0% |
|
---|
Median (4 companies) | 7.9% | 13.7% | 11.6% | 10.6% | 11.0% |
---|
Glenmark Pharmaceuticals ($GLENMARK) | 8.2% | 20.1% | 17.8% | 20.9% | 18.3% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top |
---|
Granules India ($GRANULES) | 0.9% | 5.3% | 8.8% | 15.2% | 24.3% |
Rpg Life Sciences ($RPGLIFE) | | 6.0% | 4.5% | 5.7% | 5.8% |
Alembic Pharmaceuticals ($APLLTD) | | 5.2% | 4.2% | 5.7% | 4.4% |
|
---|
Median (3 companies) | 0.9% | 5.3% | 5.1% | 5.7% | 5.8% |
---|
Glenmark Pharmaceuticals ($GLENMARK) | 4.8% | 13.6% | 7.1% | 9.4% | 6.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top 5 |
---|
Alembic Pharmaceuticals ($APLLTD) | | | 27.5% | 29.1% | 41.5% |
Granules India ($GRANULES) | | 12.8% | 15.8% | 14.2% | 18.4% |
Rpg Life Sciences ($RPGLIFE) | 19.1% | 18.3% | 6.1% | 4.5% | 0.8% |
Omega Laboratories ($OMEGALAB) | | | 0.0% | 0.0% | 0.0% |
Godavari Drugs ($GODAVARI) | | | | | |
|
---|
Median (6 companies) | 19.1% | 15.5% | 14.2% | 13.0% | 9.6% |
---|
Glenmark Pharmaceuticals ($GLENMARK) | 13.5% | 11.7% | 14.4% | 17.7% | 13.8% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
---|
Top 5 |
---|
Granules India ($GRANULES) | 2.3x | 2.0x | 2.2x | 2.4x | 2.7x |
Rpg Life Sciences ($RPGLIFE) | 1.5x | 1.6x | 2.8x | 3.6x | 1.2x |
Alembic Pharmaceuticals ($APLLTD) | | 2.0x | 1.5x | 0.7x | 0.2x |
Godavari Drugs ($GODAVARI) | | | | 1.7x | 0.0x |
Sanjivani Paranteral ($SANJIVIN) | | | 4.3x | 4.2x | 0.0x |
|
---|
Median (5 companies) | 1.9x | 2.0x | 2.5x | 2.4x | 0.2x |
---|
Glenmark Pharmaceuticals ($GLENMARK) | 2.7x | 3.2x | 2.7x | 2.1x | 2.2x |