Fitch revises Glenmark to stable

Fitch Ratings said it revised Glenmark Pharmaceuticals Ltd.'s outlook to stable from positive and affirmed the long-term issuer default rating at BB.

The agency also affirmed the BB rating on the $200 million 4˝% senior unsecured notes due 2021.

Fitch said the outlook revision reflects its expectation that Glenmark's free cash flow will be largely neutral over the next two years, and its credit ratios will not improve as previously forecast.

Glenmark's free cash flow remained negative in the financial year ended March 31 (FY17) as profitability was lower and cash taxes higher than Fitch expected.

In the agency’s view, the high cash taxes and sustained working capital investments will curb free cash generation, even as profitability is likely to narrow after the end of the exclusivity period in 1QFY18 for Glenmark's generic version of Ezetimibe, which is used to treat high cholesterol.

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