The Annual Report of 22 gives the further capex plans of the company as follows:
Existing capcity 766kl
240kl brownfield reactor capactiy at Dahej - completed during October of 2022
400kl brownfield reactor capacity at Ankleshwar - expecting completion announcement during Q3 concall
effectively the reactor capacity increases by 85% to 1406kl ...
600kl to 800kl greenfield reactor capacity at Solapur - EC obtained
- I expect that in FY23-24 this would atleast translate into production of 50% more than the previous year.... keeping OPMs same (mean of 29%) that would translate into an EPS of Rs. 48/- per share.
- I expect that FY24-25 this would translate into ideal capacity utilization.... keeping OPMs same that would translate into an EPS of Rs. 62/- per share
- I expect that in these 2 years the Solapur capex gets completed and starts tranlating into numbers from FY25-26.... keeping OPMs same and assuming Solapur runs at 400kl reactor capacity in the first full year of operation that would translate into an EPS of Rs. 80/- per share
- I expect that in FY26-27, keeping OPMS same and Solapur running at 800kl capacity it would translate into an EPS of about Rs. 100/- per share
Based on the above assumptions, namely, capex completion at Solapur on time and protecting its operating margins I come to the following conclusion as on March of 2027:
A bear case scenario of 10PE gives a target of Rs. 1,000/- per share (exclusive glenmark twins valuation by market)
A base case scenario of 20PE gives a target of Rs 2,000/- per share (zydus, dr. reddys)
A bull case scenario of 30PE gives a target of Rs 3,000/- per share (divis, cipla, sunpharma, alkem)
An euphoric scenario of 40PE gives a target of Rs. 4,000/- per share (biocon, torrent)
Please note it takes one thing to conjure up a fundamental idea and follow the same with conviction till the capex cycle comes to an end so take this as a starting point to come up with your own conviction in fundamental analysis of a particular stock. Also, The PE valuation of Glenmark group is pretty miserable by mr. market and one cant expect it to change anytime soon unless the narrative/outlook changes menaingfully.
Existing capcity 766kl
240kl brownfield reactor capactiy at Dahej - completed during October of 2022
400kl brownfield reactor capacity at Ankleshwar - expecting completion announcement during Q3 concall
effectively the reactor capacity increases by 85% to 1406kl ...
600kl to 800kl greenfield reactor capacity at Solapur - EC obtained
- I expect that in FY23-24 this would atleast translate into production of 50% more than the previous year.... keeping OPMs same (mean of 29%) that would translate into an EPS of Rs. 48/- per share.
- I expect that FY24-25 this would translate into ideal capacity utilization.... keeping OPMs same that would translate into an EPS of Rs. 62/- per share
- I expect that in these 2 years the Solapur capex gets completed and starts tranlating into numbers from FY25-26.... keeping OPMs same and assuming Solapur runs at 400kl reactor capacity in the first full year of operation that would translate into an EPS of Rs. 80/- per share
- I expect that in FY26-27, keeping OPMS same and Solapur running at 800kl capacity it would translate into an EPS of about Rs. 100/- per share
Based on the above assumptions, namely, capex completion at Solapur on time and protecting its operating margins I come to the following conclusion as on March of 2027:
A bear case scenario of 10PE gives a target of Rs. 1,000/- per share (exclusive glenmark twins valuation by market)
A base case scenario of 20PE gives a target of Rs 2,000/- per share (zydus, dr. reddys)
A bull case scenario of 30PE gives a target of Rs 3,000/- per share (divis, cipla, sunpharma, alkem)
An euphoric scenario of 40PE gives a target of Rs. 4,000/- per share (biocon, torrent)
Please note it takes one thing to conjure up a fundamental idea and follow the same with conviction till the capex cycle comes to an end so take this as a starting point to come up with your own conviction in fundamental analysis of a particular stock. Also, The PE valuation of Glenmark group is pretty miserable by mr. market and one cant expect it to change anytime soon unless the narrative/outlook changes menaingfully.