GLS was a Glenmark Pharma Subsidiary at the time of Its IPO in Aug 2021 ( Pharma & API Stocks boom period). Its IPO price was 720 and listed around 750. Its PE at the time of listing was around 24. Soon the stock start falling and after Russia Ukraine war in Jan 2022 the stock tanks to 400 (370 to 440) levels for more than one year from Feb 2022 to April 2023. Its PE at that time was 11-12 only. The API Stocks boom got busted in Jan 2022 and other API companies like Laurus and Divis showed compression in their revenue and very high compression in OPM and hence profitability. Thus their High PE also got elevated.
The average PE of API companies was above 40 in (2022-24) but GLS PE remained at 11-12 and than to 15 only. Unlike other API companies like Divis/Laurus GLS does not show degrowth and very less compression in OPM thus it profitability increased every year, but Market did not give high PE like other API companies.
Now after stake sale of Glenmark Pharma to Nirma the Price action is taking place. Although in next 1 year not much growth is expected but now share price is touching new high. Now its PE is around 28 which used to be 11/12 than 15/16 than 20 only.
What could be the reason
(1) Does Market thought that its a long story and its profitability over years gives it expected reliable longevity so its permanent PE rerating?
(2) After GPL stake sale now more institutions have entered and liquidity increased so price action is happening?
(3) Market is thinking that Pharma has not runup so Pharma Stocks are undervalued as compared to Market?
(4) Result of Promoter Change?
(5) Is PE rerating is temporary or now Permanent?
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