Motilal Oswal has reiterated a BUY call on Glenmark Pharma, with a target price of Rs2,610 and an implied upside of 19% from the current market price of Rs2,201. The brokerage sees the latest quarter as a mixed but strategically encouraging reset, with domestic formulations and the US business lagging expectations in the near term while Europe and emerging markets held up better. The report argues that Glenmark is now positioned for a more meaningful earnings scale-up in FY27 and FY28, driven by a richer product pipeline, better mix, and stronger execution across core geographies.

Quarter in focus

The June 2026 report says Glenmark delivered revenue that was broadly in line with estimates, but EBITDA missed by 7% because of softer operating performance in the domestic formulation and US businesses. PAT, however, beat estimates by 9% thanks largely to higher other income, while exceptional items related to litigation settlements also shaped the quarter’s reported numbers. The company’s sales rose 15.8% year on year to Rs37.7 billion, gross margin expanded to 68.9%, and EBITDA margin improved to 20.2%, showing that the underlying margin architecture is still rebuilding.

Key takeaway: the quarter was not flawless, but the mix of geographies and a healthier gross margin profile suggests the operating engine is stabilizing after a difficult phase.

What drove growth

North America remained an important engine, with sales up 29.4% year on year to Rs7.7 billion, aided by deferred out-licensing income recognition for ISB-2001. Europe also posted a strong showing, rising 21.4% year on year to Rs8.9 billion, while emerging markets grew 13.7% to Rs8.9 billion. Domestic formulations rose 8.2% to Rs10.2 billion, which was respectable but still below what investors would want from a business that management believes can accelerate in the coming year.

Segment watch: the strongest near-term momentum came from Europe and emerging markets, not from the US or domestic formulations.

Domestic franchise

Glenmark’s domestic formulations business is showing signs of recovery, but the pace remains uneven. The company outperformed the Indian pharmaceutical market on IQVIA data, supported by execution in cardiac, dermatology and respiratory therapies, even as diabetes products such as remogliflozin and teneligliptin lost traction after the arrival of more advanced molecules. Management remains optimistic that GLIPIQ, its semaglutide launch in vial and pre-filled pen formats, will become a meaningful contributor over the next two to three years.

The company also highlighted strong momentum in oncology, led by TEVIMBRA and BRUKINSA, and consumer care brands such as CANDID, SCALPE and BONTRESS continued to post healthy growth. Motilal Oswal expects domestic formulations sales to compound at 25% over FY26-FY28 and reach Rs57.7 billion.

US pipeline reset

The US business is the clearest swing factor in the investment case. Glenmark said logistics disruption linked to Middle East tensions hurt performance in 4QFY26, and the brokerage believes the segment should improve as niche approvals and launches scale up in FY27. Products such as g-Flovent, g-Flonase, g-Horizant and g-Inlyta are expected to support the next leg of growth, while the recently approved Fluticasone Propionate Inhalation Aerosol USP 44 mcg may benefit from 180 days of market exclusivity after commercialization.

Investor level: Motilal Oswal expects US sales to grow at a 9% CAGR to Rs41.3 billion, making this the most important operational lever for rerating the stock.

Europe and emerging markets

Europe is emerging as a dependable growth pillar. Ryaltris continues to gain share, Winlevi has already been launched in the UK, and the company expects broader commercialization across licensed European territories in FY27 after EMA approval. Management also plans to launch two to three respiratory products in Europe during FY27, which should deepen the branded respiratory franchise.

Emerging markets are also expanding steadily, with Russia, LATAM, MENA, Malaysia and Australia showing encouraging traction. Ryaltris has been commercialized in 55 markets and filed in more than 90 countries, a sign that Glenmark is trying to convert its pipeline into a broad international branded platform. Motilal Oswal expects Europe sales to grow at a 17% CAGR to Rs42.4 billion and EM sales to rise 10% CAGR to Rs35.7 billion over FY26-FY28.

Guidance and valuation

Management guided for FY27 revenue of Rs170 billion to Rs180 billion, up from Rs133 billion in FY26, and expects EBITDA margins of 21% to 22%. It also flagged FY27 capex of Rs9 billion, R&D spending of 7% to 8% of sales, and working capital days of 115 to 120. Motilal Oswal has slightly raised its FY27 and FY28 earnings estimates and values Glenmark at 25 times 12-month forward earnings.

Levels for investors

The report gives a current market price of Rs2,201 and a 12-month target of Rs2,610, implying an upside of 19%. On that basis, the immediate level to watch is Rs2,201 as the reference price, Rs2,610 as the target, and the valuation case hinges on whether Glenmark can deliver the expected US recovery and maintain momentum in domestic formulations and overseas markets. In practical terms, the stock is being framed as a recovery-and-rebuild story rather than a pure defensive pharma bet.

Trading lens: for investors tracking the report, the target remains Rs2,610, while the core thesis depends on execution across US launches, domestic portfolio expansion and margin normalization.

What could go wrong

The main risks are familiar: weaker-than-expected US launches, delayed regulatory approvals, and any setback in the ramp-up of new products. Domestic diabetes therapies are already under pressure from superior molecules, which means Glenmark must keep refreshing the portfolio to defend growth. R&D intensity and capex are both rising, so if revenue does not accelerate as expected, earnings leverage could disappoint.

Still, the broader message from Motilal Oswal is clear. Glenmark has emerged from a strategic reset with a pipeline that is richer, a geographic mix that is improving, and a valuation framework that assumes materially stronger earnings over the next two years.