GLENMARK

Glenmark Pharmaceuticals’ (Glenmark) Q1FY26 performance was below our expectation due to muted show across ***** in other operating income inflated margins and PAT. Discontinuation of smaller brands dampened India growth to 3.7% YoY in Q1 and revival is likely Q3 onwards. Resumption of commercial supply from Monroe along with injectable and respiratory launches in H2FY26 may revive US sales, while Europe and EMs may grow in double digits. Out-licensing deal of ISB with Abbvie will close by Sept’25 and could incur R&D cost of USD 70mn p.a, in IGI in each of the next 3 years. Cut FY26/27E EBITDA by ~8%/7% to factor in lower margins and slowdown in growth. Maintain SELL with lower TP of INR 1,570, based on 18x FY27E EPS and NPV of INR 320 for ISB 2001 deal.