On Monday, shares of Glenmark Pharmaceuticals extended its gains for the third consecutive session, gaining close to 9 percent to Rs 328.50 apiece on NSE. The surge comes after brokerage and research firm CLSA upgraded its rating on the stock from "Sell" to "Buy" and also increased the price target from Rs 350 to Rs 410.
The stock has been gaining in trade since the release of its financial results for the second quarter of 2019-20. However, the shares have lost over 50 percent in value in 2019.
Glenmark Pharma had reported an 8 percent increase in its profit for the September-ended quarter at Rs 255.45 crore.
CLSA said that there has been no reduction in the pharma company's net debt in the first half of the financial year 2019-20 and it is unlikely to decline significantly in the near future.
Its upgrade in rating was on account of the quarter results and attractive valuation.
It also said that the company's US sales were strong in comparison to the previous quarter while India performance continued to grow above industry average.
It also pointed out all geographies witnessed a year-on-year growth for the first time in over 3 years.
The brokerage has also increased the EPS (earnings per share) target for the stock for the financial year 2021-22 by three times to 22 percent but added that the leveraged balance sheet remains a concern.