💰 Financial Performance

Revenue Growth by Segment

India formulations grew 32% in FY25 (total revenue INR 13,321 Cr). The US market contracted by 2.5% in FY25. In Q2 FY26, India formulation sales were INR 165 Cr, an 87% decline from INR 1,281.7 Cr due to GST transition impacts. Consolidated revenue for H1 FY26 was INR 9,311.3 Cr, up 39.4% YoY.

Geographic Revenue Split

India (significant contributor with 32% growth in FY25), US (contraction of 2.5% in FY25), Europe and Rest of World (continued traction and growth).

Profitability Margins

Operating profitability improved from 10.1% in FY24 to 17.7% in FY25. Net profit was INR 687 Cr in FY25 compared to a loss of INR 1,686 Cr in FY24. The company targets an EBITDA margin of 23% in H2 FY26 and 25% in the future.

EBITDA Margin

EBITDA margin was 17.7% in FY25, up from 10.1% in FY24. The company aims for 23% in H2 FY26 and 25% long-term, driven by a shift to branded products and licensing income from the AbbVie deal.

Capital Expenditure

Planned annual capital expenditure is INR 700-800 Cr over the medium term to support growth and maintain 10 manufacturing facilities.

Credit Rating & Borrowing

CRISIL AA with a Stable outlook; short-term rating is CRISIL A1+. Ratings were reaffirmed following the USD 700 million AbbVie deal. The company repaid INR 1,300 Cr of gross debt post-deal.

⚙️ Operational Drivers

Raw Materials

Not disclosed in available documents; however, 'benign input costs' were cited as a key driver for the margin improvement to 17.7% in FY25.

Capacity Expansion

The company currently operates 10 manufacturing facilities across India, the USA, and other countries. While specific MTPA expansion figures are not disclosed, the company plans to incur annual capital expenditure of INR 700-800 Cr over the medium term to support its 15% growth target.

Raw Material Costs

Raw material costs are described as 'benign' and 'stable', contributing to the improvement in operating margins to 17.7% in FY25. Specific cost as a % of revenue is not disclosed.

Manufacturing Efficiency

The company maintains an inventory level of 80 days, which is more efficient than the industry average of 90 days. This efficiency supports the H2 FY26 growth targets and was achieved through a one-time working capital correction of INR 1,600 Cr.

Logistics & Distribution

Distribution costs were impacted by freight and reverse logistics during the GST transition, contributing to the 87% decline in India primary sales in Q2 FY26. The company uses a unique 3-tier distribution system in India.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Glenmark 3.0 strategy targets 15% annual growth through a branded-led portfolio and innovation. The USD 700M AbbVie upfront payment will be used to reach zero debt, improving free cash flow for reinvestment. US growth is expected to revive with new launches, while India continues to outperform the market (10.8% vs 6.4% growth).

Products & Services

Pharmaceutical formulations, Active Pharmaceutical Ingredients (APIs), and innovative assets like ISB 2001 (biologics).

Brand Portfolio

Glenmark, Ichnos Glenmark Innovation (IGI).

New Products/Services

ISB 2001 (partnered with AbbVie) and new US product launches are expected to drive future revenue. The AbbVie deal total value is USD 1.925 billion.

Market Expansion

Expansion is focused on Europe and Rest of World (ROW) markets, alongside a revival of the US market through new product launches.

Market Share & Ranking

Glenmark's India formulation business grew 10.8% in Q2 FY26, significantly outperforming the overall Indian pharma market growth of 6.4%.

Strategic Alliances

Exclusive global licensing deal with AbbVie Inc. for ISB 2001 (total value USD 1.925 billion) and the sale of a majority stake in Glenmark Life Sciences to Nirma Ltd in March 2024.

🌍 External Factors

Industry Trends

The industry is shifting toward innovation-led biotech deals (e.g., USD 1.925B AbbVie deal) and branded portfolios (Glenmark 3.0) to achieve 25% margins and offset generic pricing pressure in the US (2.5% contraction).

Competitive Landscape

Key competitors include other large Indian pharma companies. Glenmark competes by outperforming market growth (10.8% vs 6.4%) and moving into innovative biologics to differentiate from generic peers.

Competitive Moat

The company's moat is built on its robust R&D platform, specifically through Ichnos Glenmark Innovation (IGI), which successfully developed ISB 2001. This asset's validation through a USD 1.925 billion deal with AbbVie creates a competitive advantage in the innovative biologics space.

Macro Economic Sensitivity

The business is sensitive to regulatory changes like the GST regime, which caused an 87% temporary drop in India sales. It is also exposed to US market dynamics, where a lack of new launches led to a 2.5% revenue contraction.

Consumer Behavior

Demand is driven by a strong position in the chronic therapeutic segment in India, which is fast-growing and less sensitive to short-term economic shifts than acute segments.

Geopolitical Risks

The company operates 10 facilities globally and exports to developing nations, exposing it to trade barriers and regulatory risks in diverse international markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are affected by pricing controls (e.g., INR 900.1 Cr settlement for pricing practices), manufacturing standards across 10 global facilities, and tax regime changes like GST which impacted India sales by 87%.

Environmental Compliance

The company has a board-level ESG committee to monitor its ESG strategy and action plans. Specific compliance costs in INR are not disclosed.

Taxation Policy Impact

The company paid INR 75 Cr in cash tax as part of its Q2 FY26 cash flow reconciliation. It aims for tax efficiencies through balance sheet restructuring.

Legal Contingencies

Exceptional losses of INR 372.8 Cr in FY25 and INR 900.1 Cr in FY24 for legal settlements regarding pricing and other claims. These settlements significantly impact cash generation and debt metrics.

⚠️ Risk Analysis

Key Uncertainties

Key risks include the uncertain returns on high R&D investments (7% of sales), potential for sluggish business performance impacting the 15% growth target, and further stretch in the working capital cycle.

Geographic Concentration Risk

India formulations (32% growth in FY25) and the US market (-2.5% contraction) are the primary regions. The US market's performance is a key risk factor for overall top-line improvement.

Technology Obsolescence Risk

The company is mitigating technology risks by transitioning to 'Glenmark 3.0', focusing on innovative biologics (ISB 2001) to move up the value chain and avoid the obsolescence of traditional generic manufacturing.

Credit & Counterparty Risk

Receivables quality is being addressed by discontinuing legacy pre-collection practices and taking a one-time INR 1,600 Cr provision for debtors and inventory to ensure the balance sheet reflects true capital efficiency.