Glenmark Life Sciences has limited competitor for next two years as one can't open an API manufacturing company overnight.
Glenmark Life Sciences is an API manufacturer and API demand has gone up to the tune of near 50 to 60 per cent in the last one year
Glenmark Life Sciences shares make tepid debut at Indian bourses as the Active Pharmaceutical Ingredients (APIs) manufacturer company got listed today at meager 4 per cent premium. This listing is a shocker to the markets as the company is in unique API manufacturing business, which has strong business outlook. API demand has soared around 50 to 60 per cent in the last one year and it is expected to further remain in high demand. So, fundamentals of the company are quite strong and hence tepid debut at Dalal Street might be an opportunity for those who missed the opportunity during IPO allocation. According to experts, one needs to keep an eye on the counter for first one to two trade sessions next week as some institution may invest in the stock as its valuations are quite attractive at this level.
Advising investors to buy Glenmark Life Sciences shares; Avinash Gorakshkar, Head of Research at Profitmart Securities said, "Glenmark Life Sciences is an API manufacturer and API demand has gone up to the tune of near 50 to 60 per cent in the last one year. In coming times, this API demand is expected to remain upside. The company has limited competitor for next two years as one can't open an API manufacturing company overnight. It takes around 15-18 months to get all clearances for incepting an API manufacturing company. So, this API business is expected to fuel Glenmark Life Sciences shares in next 6 months to 12 months and my advice to those who have this share in their portfolio is to hold the counter for at least 6 months as the company is expected to report strong quarterly numbers."
On whether one can buy the counter from the open market Avinash Gorakshkar said, "Since, valuations of Glenmark Life Sciences shares are quite attractive, institutions are expected to make investment in the counter. If that happens, the share price of the company may shot up in immediate short-term. So, those who want to make fresh buying in the counter should keep an eye on the stock for at least first two trade sessions next week. Any institution investing in the stock would be an opportunity for momentum buy in the counter. However, in case there is no institutional investment coming in the stock, one can still buy the counter at around ?700 levels and hold it for 6 to 12 months." He said that the counter will soon showcase four-digit number as fundamentals of the company is very strong.
Glenmark Pharmacuticals vs Glenmark Life Sciences
However, Ravi Singhal, Vice Chairman at GCL Securities had other advice. He advised lucky bidders to book profit even when its mere 5 per cent and switch their money in Glenmark Pharmaceuticals, the parent company of Glenmark Life Sciences. Singhal said that out of the net ?1,513.60 crore raised from this public issue, around 70 per cent will go to the parent company while rest 30 per cent will remain with Glenmark Life Sciences. So, in future, Glenmark Pharmaceuticals share price will show more upside moves in comparison to Glenmark Life Sciences. He advised both share holders of Glenmark Life Sciences shares and fresh buyers to look at Glenmark Pharmaceuticals shares and try buying it at ?550 to ?570 levels for the 3 to 6 months target of ?675. However, Singhal strictly advised investors to maintain stop loss at ?520 while taking any position in Glenmark Pharmaceuticals shares.