CMP ₹1,421 | Q4 PAT ₹2,619 Cr | EPS ₹37.11 | FY25 PAT ₹11,113 Cr | P/E ~12.8x | Dividend ₹2.5/share
📌 At a Glance:
Glenmark just posted jaw-dropping Q4 numbers, but before you start thinking “multibagger loading”, read the footnotes:
- Yes, Q4 PAT was ₹2,619 Cr ✅
- But ₹1,749 Cr was one-time exceptional charges
- Without the adjustment, profit is actually closer to ₹870 Cr
- FY25 EPS: ₹37.11
- CMP ₹1,421 ➝ P/E ~38x without adj., ~12.8x with adj.
- Final Dividend: ₹2.5 per share ✅
- Revenue Growth YoY: +12.7%
- Net Debt ✅ reduced by ~₹5,200 Cr post GLS exit
📊 Q4 FY25: Too Good To Be True?
| Metric | Q4 FY25 (₹ Cr) | Q3 FY25 (₹ Cr) | Q4 FY24 (₹ Cr) |
|---|---|---|---|
| Revenue | 3,388 | 3,202 | 3,016 |
| Reported PAT | 2,619 | 348 | 2,609 |
| Exceptional Item | ₹1,749 Cr (Loss) | None | ₹4,467 Cr (loss) |
| Adjusted PAT (Est.) | ~₹870 Cr | 348 | ~₹2,620 Cr (included GLS gain) |
| EPS (Reported) | ₹37.11 | ₹5.24 | ₹37.10 |
💥 YoY PAT appears flat only because last year had Glenmark Life Sciences sale profits.
🧾 This year’s spike? Reversal of prior provisions + one-time US legal settlements booked.
🧬 FY25 vs FY24 (Consolidated)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) | Change |
|---|---|---|---|
| Revenue | 13,322 | 11,813 | 🔼 +12.7% |
| Net Profit | 11,113 | 5,167 | 🔼 +115% (headline) |
| EPS | ₹37.11 | ₹14.08 | 🔼 +163% |
| Net Worth | ₹88,494 Cr | ₹78,479 Cr | 🔼 +13% |
| Total Assets | ₹1,60,495 Cr | ₹1,43,586 Cr | 🔼 +12% |
But here’s the twist:
- FY25 exceptional charges = ₹1,978 Cr
- FY24 included loss from GLS stake sale & US DOJ provisions = ₹9,009 Cr loss
➡️ FY25 “profit” includes reversal of those FY24 charges
➡️ So the YoY jump is mostly accounting illusion
⚖️ Legal Fine & Accounting Jugaad
📄 Glenmark & its US unit settled:
- A US DOJ antitrust lawsuit for ₹1,749 Cr
- Plus: scrapped innovation infra, shutdowns, severance = another ₹228 Cr
- These were marked as “exceptional items”
So while net profit looks inflated, it’s actually bookkeeping karma reversal from earlier provisions.
💰 Dividend & Capital Moves
- Final Dividend: ₹2.5/share (250% on FV ₹1)
- Cash Equivalents: ₹1,315 Cr
- Capex: ₹3,409 Cr in FY25
- Debt Cut: Sharp drop in borrowings post GLS stake sale
- Operating Cash Flow: ₹5,887 Cr ✅
- Net Working Capital Management Improved 💪
📉 Valuation
- EPS FY25 (reported): ₹37.11
- CMP: ₹1,421
- P/E (face value): 38x
- P/E (adjusted earnings): closer to 12.8x
✅ Compared to peers like Cipla (P/E ~26), Lupin (~24), Glenmark is cheap — if you believe profits are sustainable.
🧠 EduInvesting Take: “This is not EPS. This is ‘Excel se margin nikla hua’ profit.”
Glenmark isn’t lying — but it sure is benefiting from creative but legal accounting:
- They cleared off big legacy liabilities
- They’re leaner post GLS exit
- They booked clean profits this year, but it’s partly artificial
- Yet, operational revenue is growing steadily
⚠️ Risks & Red Flags
- US generic pricing pressure remains
- Innovation unit (IGI) shutdown = lost R&D future bets
- FY25 PAT includes reversal of FY24 losses — not recurring
- Regulatory compliance and litigation risk continues (DOJ, class actions)
🎯 Glenmark Verdict: “It looks like a blockbuster. But the script was rewritten.”
Glenmark is not faking its turnaround — it just chose to show it all at once.
Does it deserve ₹1,421? Maybe.
Will FY26 match these numbers? Unlikely — unless another accounting jackpot drops.
But what is true:
- Pharma business is recovering
- Debt is down
- Cash flow is healthy
- Real EPS = maybe ₹20–25 sustainable going forward
So at 60x past, or 25x adjusted, the market will need new real growth to hold this valuation.
Author: Prashant Marathe
Date: May 23, 2025
Tags: Glenmark Pharmaceuticals, FY25 Results, DOJ Fine, Pharma Stocks, EPS Adjustment, Dividend Stocks, EduInvesting, Accounting Tricks, Legal Settlement, EPS Illusion
