S&P: Glenmark view to negative

S&P said it revised the outlook to negative from stable on the BB long-term corporate credit rating on Glenmark Pharmaceuticals Ltd.

The agency also said it affirmed the rating at BB, along with the BB rating on the company's senior unsecured notes.

The negative outlook reflects the risk of delayed de-leveraging for Glenmark, resulting in a ratio of debt-to-EBITDA of about 2.8x in fiscal 2018, against a previous expectation of less than 2x, S&P said.

The agency said it estimates Glenmark will continue to register negative free operating cash flow on the back of relatively slower revenue growth with profitability constrained by natural price erosion.

Also affecting profitability is elevated research and development and capital expenditure costs, along with higher working investments, S&P said.

The agency said it still expects the company to maintain a ratio of debt-to-EBITDA of less than 3x, but now expects lower revenue growth due to a weaker-than-expected rate of new approvals.

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