Valuation Metrics and Recent Changes
As of 2 February 2026, Glenmark Pharma’s price-to-earnings (P/E) ratio stands at 22.41, a figure that has contributed to its revised valuation grade from very attractive to attractive. This adjustment signals a moderate re-rating by the market, yet the stock remains favourably valued compared to several peers. The price-to-book value (P/BV) ratio is currently 5.71, indicating a premium valuation but still within a range that investors find reasonable given the company’s robust return metrics.
Other key valuation multiples include an enterprise value to EBIT (EV/EBIT) of 13.94 and an EV to EBITDA of 12.19, both reflecting efficient operational earnings relative to enterprise value. The EV to capital employed ratio is 6.56, while EV to sales is 3.23, underscoring Glenmark’s ability to generate sales and capital returns at a competitive cost of capital.
The PEG ratio, a measure of valuation relative to earnings growth, is exceptionally low at 0.03, suggesting that the stock is undervalued relative to its growth prospects. Dividend yield remains modest at 0.26%, consistent with the company’s reinvestment strategy in research and development.
Comparative Peer Analysis
When benchmarked against key industry peers, Glenmark’s valuation stands out as attractive. For instance, Aurobindo Pharma and Alkem Laboratories are rated as fair, with P/E ratios of 19.84 and 28.37 respectively, while Biocon, despite its attractive rating, commands a significantly higher P/E of 128.18, reflecting market expectations of premium growth or risk factors.
On the higher end of the valuation spectrum, Abbott India, GlaxoSmithKline Pharmaceuticals, and Laurus Labs are classified as very expensive or expensive, with P/E ratios ranging from 38.38 to 59.27. This contrast highlights Glenmark’s relative value proposition within the sector, especially given its strong return on capital employed (ROCE) of 44.14% and return on equity (ROE) of 23.46%, which are indicative of operational efficiency and shareholder value creation.
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Price Performance and Market Context
Glenmark Pharma’s current share price is ₹1,939.40, down 3.84% on the day from a previous close of ₹2,016.90. The stock has traded within a 52-week range of ₹1,274.70 to ₹2,286.15, reflecting significant volatility but also substantial upside potential over the medium term.
Comparing returns to the broader Sensex index reveals Glenmark’s strong outperformance over longer horizons. The stock has delivered a 33.83% return over the past year versus Sensex’s 5.16%, and an impressive 422.61% over three years compared to Sensex’s 35.67%. Even over five years, Glenmark’s return of 310.59% dwarfs the Sensex’s 74.40%, underscoring the company’s growth credentials and resilience amid sector headwinds.
Quality and Financial Health Indicators
Glenmark’s Mojo Score of 74.0 and a current Mojo Grade of Buy (downgraded from Strong Buy on 6 June 2025) reflect a solid investment case supported by strong fundamentals. The company’s market cap grade is 2, indicating a mid-to-large cap status with stable market capitalisation.
Return metrics remain robust, with ROCE at 44.14% and ROE at 23.46%, signalling efficient capital utilisation and strong profitability. These figures are critical in justifying the company’s valuation premium relative to some peers and support the view that Glenmark is well-positioned to sustain growth and generate shareholder returns.
Sector and Industry Considerations
The Pharmaceuticals & Biotechnology sector continues to face challenges including regulatory scrutiny, pricing pressures, and competitive dynamics. However, companies like Glenmark that combine strong research pipelines with operational efficiency are better placed to navigate these headwinds. The company’s valuation shift from very attractive to attractive suggests that while the market has adjusted expectations slightly, Glenmark remains a compelling pick within the sector.
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Investment Outlook and Conclusion
Glenmark Pharmaceuticals Ltd’s recent valuation adjustment reflects a nuanced market reassessment rather than a fundamental deterioration. The company’s P/E of 22.41 remains attractive relative to many peers, especially given its superior return ratios and growth track record. The exceptionally low PEG ratio of 0.03 further highlights the stock’s undervaluation relative to earnings growth potential.
While the stock has experienced short-term price pressure, its long-term performance versus the Sensex and sector peers underscores its resilience and growth capability. Investors seeking exposure to the Pharmaceuticals & Biotechnology sector may find Glenmark’s current valuation and quality metrics a compelling combination, particularly as the company continues to deliver strong operational results and maintain a healthy financial profile.
Overall, Glenmark’s shift from very attractive to attractive valuation status should be viewed as a recalibration within a still-favourable investment framework, offering a balanced risk-reward profile for discerning investors.
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