Glenmark Pharmaceuticals outlays Rs 700 crore capex plan for FY25 to boost growth

Pharmaceutical giant Glenmark Pharmaceuticals has outlined its roadmap for FY2025 focusing on growth and expanding global market presence. Glenmark has earmarked Rs 700 crore for consolidated capital expenditures (CAPEX) to bolster its operational infrastructure.  

The allocation will be utilised to augment the company’s capabilities to meet growing demand efficiently and sustain long-term growth, the management told Business Today. 

The pharma giant aims to achieve consolidated revenue between Rs 13,500 crore and Rs 14,000 crore, with a push towards market leadership and financial strength.  

Officials said that the firm will invest significantly in research and development (R&D) to meet its revenue target and has allocated 7-7.25 percent of its total sales to R&D efforts. 

“This investment highlights the dedication to innovation and developing pharmaceutical solutions. It is expected to enhance Glenmark’s competitive edge, fostering the discovery of new therapies and expanding its product portfolio,” the company said. 

Operationally, Glenmark is targeting an EBITDA margin of approximately 19 percent. The company is also eyeing a double-digit profit after tax (PAT) margin while focusing on sustainable financial performance to provide value to stakeholders, the company's management said. 

Glenmark’s formulation business remains integral to its global strategy, covering branded, generics and over-the-counter (OTC) products in therapeutic areas like dermatology, respiratory, oncology, cardiac, diabetes, and oral contraceptives. This diversified portfolio continues to drive success across international markets, the management said. 

Q4 performance 

On May 24, Glenmark Pharmaceuticals released its financial results for the fourth quarter ending March 31, 2024, which showed growth across various markets except for North America. For Q4FY24, Glenmark’s consolidated revenue increased by 2.1 percent on a year-on-year basis to Rs 3,063 crore from Rs 3,000.5 crore. The company reported a rise in EBITDA at Rs 504.3 crore, a rise of 26.7 percent from the previous year’s Rs 397.9 crore, with an EBITDA margin of 16.5 percent. 

A breakdown of regional contribution showed the company’s India business posting a healthy growth of 12.9 percent to Rs 939.1 crore, while its Rest of the World (RoW) segment grew by 9.7 percent to Rs 752.8 crore. The European region saw a marginal uptick of 0.7 percent to Rs 611.8 crore, while the North American region experienced a 12.4 percent decline in revenue at Rs 755.7 crore. 

For the fourth quarter, Glenmark’s consolidated revenue increased moderately (a gain of 2 percent) to Rs 11,813.1 crore compared to Rs 11,583.2 crore in the previous year. However, EBITDA decreased to Rs 1,195.3 crore due to a one-time sales impact in India during Q3FY24, resulting in an EBITDA margin of 10.1 percent.  

During Q3, the company implemented changes in the overall distribution model of its India business through the consolidation of stock points and the rationalisation of channel inventories leading to a temporary dip in sales during the quarter.  

Going forward, this will help improve the company’s operating margins and overall working capital, the company said. The changes will enable the company to accelerate the roll-out of its anti-counterfeit packaging across the country. 

Management outlook

“This past year has been a period of significant transition and transformation for Glenmark. We successfully divested a majority stake in Glenmark Life Sciences, concluding the year in a strong net cash-positive position. Our branded markets continued to deliver robust growth, particularly in Europe and other key international markets. While we encountered some headwinds in our US business, we remain optimistic about our ability to regain our growth trajectory in the coming year,” Glenn Saldanha, Chairman and Managing Director of Glenmark Pharmaceuticals Ltd, said. 

“We have made significant progress in advancing our strategy of building global brands. The successful commercialisation of Ryaltris, our novel allergic rhinitis treatment, in 34 markets worldwide is consistently gaining market share in these geographies. Additionally, we have also in-licensed two speciality products – Winlevi and Envafolimab. As we continue to move up the value chain and enhance our product mix, we are confident of achieving significant improvement in our operating margins going forward,” he added. 

Winlevi is a cream used to treat acne, while Envafolimab is an injection used to help treat certain types of cancer.