Glenmark has caught everyone's eye post a spectacular 35% rise in a single session yesterday, the stock is already up 100% in last 3 months. Let's dig in on details on what future holds for Glenmark.

Glenmark has launched the antiviral drug favipiravir post DCGI approval under the brand name Fabiflu for the treatment of mild to moderate COVID-19 cases. First thing first, Glenmark will be publishing its Q4 results this week, which I do not expect to be positive. The regulatory hurdles and competitive pressures in the US, which is its primary market are still to be dealt with. 

There are ongoing debates on how this drug can change the fortunes of the company, most of the analysts are not really bullish. The medicine is more of an flu option and not a cure for a COVID-19 patient, they can be treated by other flu medicines too. Also competition in this space is high with Cipla launching its Ramdesiver, also companies such as Hikal, Strides, SMS Pharma are expected to launch similar drug soon.

However it cannot be denied that the medicine is effective support treatment for the COVID 19 Patients and will be used widely. Also Glenmark is going to have first move advantage for sure and will have the opportunity to grab a decent share in domestic market. What most of analysts are not taking into consideration is the number of cases that India currently has and the rate at which they are rising. Globally there is no vaccine for COVID-19 therefore the spread, especially in country like India is expected to be multi-fold. We are now in a phase where 1 lakh new patients emerge in every 5-6 days, even if a vaccine is developed the market is not getting it until 2021.

Also the another thing that should not be ignored is the technical view of the stock. If there is something that is way ahead of the information available is the price itself. Let's look on how the Glenmark has setup before breaking out:

No doubt its a clean breakout after good consolidation, we can have the stop loss around 420 where it had seen a massive up move.

The risk factors though shouldn't be ignored, pricing of the competitors will play a crucial role plus the Q4 results might drag a little. From the CMP of 460, I will suggest to hold with a SL of 7-8% that is 420.

Stay tuned for the updates on this counter.

Note: The Above is just a information available in public domain and therefore, should not be taken as a research report.

Registration status with SEBI:  I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.

Disclosure : Currently I do not hold this stock in my portfolio, any future entry made will be updated on the blog timely.

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