The brokerage sees weak earnings trajectory and high leverage as areas of concern.
Shares of Glenmark Pharma fell more than 4 percent intraday on September 13 after global brokerage house CLSA maintained its sell call on the stock amid weak earnings and high debt concerns.
The stock has corrected 30 percent in past three months. It was quoting at Rs 366.85, down Rs 15.55, or 4.07 percent, on the BSE at 1130 hours.
"Company's leverage is higher than its peers and has a debt repayment of Rs 2,700 crore, which is due by FY22," said the brokerage house that has set a target price at Rs 350 per share.
CLSA said Glenmark's cashflow generation in FY19 was weak, with negative free cash flow of Rs 280 crore. Raising funds would be a key catalyst, it added.
The brokerage sees weak earnings trajectory and high leverage are areas of concern.
Glenmark's consolidated profit in Q1FY19 fell 53 percent year-on-year (YoY) to Rs 109.28 crore, but figures are not comparable as the last financial year included one-time forex gain of Rs 138.21 crore.
Consolidated revenue grew 7.3 percent YoY to Rs 2,322.87 crore in Q1.
After company's earnings on August 13, CLSA also had a sell call on the stock but slashed price to Rs 350 from Rs 500 as they expect earnings growth to remain under pressure.
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