Goldman Sachs has initiated a coverage on Glenmark Life Sciences with a buy rating and a target price of Rs 850.
Glenmark Life Sciences is a leading developer and manufacturer of select high value, non-commoditised active pharmaceutical ingredients (APIs) and Goldman Sachs sees this as an addressable market of $142 billion, growing at 6.5 percent on an annual basis.
Goldman Sachs expects the company to have a topline compounded annual growth rate (CAGR) of 16 percent over the next three years between FY21 and FY23 largely driven by three reasons, one is diversifying its customer base, two is leveraging relationships with large pharmaceutical companies to expand its CDMO business, and three is raising its production capacities in both the facilities in Ankleshwar as well as in Dahej.
While the EBITDA margins will be stable given the pace, Goldman Sachs expects a profit after tax (PAT) growth of over 24 percent over the next three years.
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