Glenmark Life Sciences Declares Interim Dividend of ₹22.50 Per Share, Share Jump

Glenmark Life Sciences, a pharmaceutical company, recently declared an interim dividend of ₹22.50 per share. This announcement was made on October 9, 2023, through an exchange filing, and the record date to eligible shareholders for the interim dividend is set for October 17, 2023. Shareholders who hold company shares in their demat accounts on or before this date will be entitled to receive the dividend. The actual payment of the interim dividend to eligible shareholders is scheduled for October 23, 2023. Previous Glenmark Life Sciences announced a dividend of 1050% or ₹21 per share.

Recent Developments

Previously, On Friday, September 22, Nirma announced to acquisition of a 75% stake in Glenmark's subsidiary, Glenmark Life Sciences. As per Glenmark Pharmaceuticals exchange filing on Thursday, September 21, regarding the sale of a 75% stake in Glenmark Life Sciences to Nirma. This deal closed at a price of ₹615 per share, for a total of ₹5,651.75 crore. Even after this sale, Glenmark Pharma still holds a 7.84% share in Glenmark Life Sciences.

Glenmark Life Sciences went public in August 2021 at ₹720 per share. This marks Nirma's entry into the active pharmaceutical ingredient (API) sector, representing a shift in their business. Glenmark Pharma's share rose 100%, while Glenmark Life Sciences' share price also gave a 63% return in the last year. In contrast, nifty had recorded a gain of about 13% over the same period.

Glenn Saldanha, Chairman and Managing Director of Glenmark Pharma, expressed his enthusiasm about the deal. ‘Glenmark's strategic intent is to move up the value chain and become an innovative and brand-led organization. Additionally, he pointed out that the transaction would strengthen shareholder value through deleveraging and enhance overall returns ‘He said.

Saldanha also added investors like Nirma, known for its long-term growth orientation and employee-friendly approach, in contrast to private equity firms.

Nirma's Expansion into Pharma

This acquisition is a big deal for the Nirma Group, which is a large and diverse conglomerate making more than $2.5 billion in annual revenue. Dr. Karsanbhai Patel founded this group and has been actively exploring opportunities in the pharmaceutical industry. Earlier this year, Nirma acquired a 100% stake in Stericon Pharma Private Limited, a company specializing in the production of sterile contact lens cleaning solutions and eye drops.

Hiren Patel, the Managing Director of Nirma, stated, ‘This acquisition is crucial for our pharmaceutical business to grow further. It fits perfectly with Nirma's goal of offering top-notch healthcare products that people can afford. Plus, it helps support the "Make in India" initiative by focusing on homegrown research and development.’

Q1 FY24 Performance

In the first quarter of the financial year 2023-24 (Q1FY24), Glenmark Life Sciences Ltd, had a total revenue of ₹5,784.5 million, which is 18% higher, compared to the same period last year. Net profit stood at ₹1,354.5 million, marking a 24% increase from the previous year.

The cost of raw materials for the manufacturing of active pharmaceutical ingredients (API) rose by 14.1% year-on-year to ₹2,982.13 million in this fiscal year.

The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was ₹1,950 million, showing a 24.8% increase compared to the previous year.

During the quarter, Glenmark Life Sciences generated a strong free cash flow of ₹982 million, resulting in cash and cash equivalents of ₹3,820 million as of June 30th.