Glenmark Pharmaceuticals Ltd. experienced a sharp decline in its second-quarter financial performance for FY27, leading to a 4% drop in its share price during Friday's trading. The pharmaceutical company's consolidated profit after tax (PAT) plummeted by 56.8% year-on-year (YoY), while revenue from operations decreased by nearly 30%.
The company reported consolidated revenue of Rs 4,247 crore for the September quarter, a notable reduction from Rs 6,047 crore in the same period last year. Consolidated PAT fell to Rs 264 crore, down from Rs 610 crore a year ago. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also saw a significant drop of 63.4% to Rs 864 crore, with the EBITDA margin contracting by approximately 1,900 basis points to 20.3%.
Key Factors Behind the Q2 Performance
The primary driver behind the reported revenue decline was a steep fall in the North American business, which saw revenue decrease by 72.9% YoY to Rs 1,209 crore. However, Glenmark clarified that, excluding deferred out-licensing income recognition for ISB 2001, its core North America business actually recorded growth of around 31% during the quarter.
In contrast to the North American challenges, other segments demonstrated resilience:
- India Formulations: Recorded a like-for-like growth of approximately 14% YoY, outperforming the broader Indian pharmaceutical market across key therapy areas such as dermatology, respiratory, cardiac, and oncology.
- Europe: Revenue increased by 6.2%.
- Emerging Markets: Showed robust growth of 33.2%.
On a like-for-like basis, Glenmark's consolidated revenue grew approximately 20% YoY for the quarter. The company also reported an adjusted PAT of Rs 485 crore, with an adjusted PAT margin of 11.4%, significantly higher than its reported PAT.
Management Outlook and Future Guidance
Chairman and Managing Director Glenn Saldanha commented on the results, stating that the second quarter highlighted the strength and resilience of the company's base business. He affirmed that Glenmark remains on track to achieve its FY27 guidance.
Despite the sharp decline in reported quarterly earnings, Glenmark has maintained its full-year consolidated revenue guidance of Rs 17,000-18,000 crore and an EBITDA margin guidance of 21-22%. The company's ability to sustain growth in its core businesses and deliver the anticipated recovery in North America will be crucial monitoring points in the upcoming quarters.