Credit Rating

September 11, 2026 To, To, National Stock Exchange of India Limited, BSE Limited, “Exchange Plaza”, Corporate Relationship Department, 5th Floor, Plot No. C/1, G Block, 2nd Floor, New Trading Ring, Bandra- Kurla Complex Bandra (East), P.J. Towers, Dalal Street, Mumbai – 400 051 Mumbai – 400 001 NSE Symbol: GLENMARK Scrip Code: 532296 ISIN: INE935A01035 ISIN: INE935A01035 Our Reference No. 53/26-27 Our Reference No. 53/26-27 Sub.:- Regulation 30 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 – India Ratings and Research Dear Sir, With reference to the subject mentioned above, kindly find enclosed rating rationale issued by India Ratings and Research for your reference. Request you to kindly take the same on record. Thanking you, Yours faithfully, For Glenmark Pharmaceuticals Limited Rashmi Khandelwal Company Secretary & Compliance Officer ACS - 28839 Glenmark Pharmaceuticals Limited Glenmark House, B D Sawant Marg, Andheri (E), Mumbai 400 099 T: 91 22 4018 9999 F: 91 22 4018 9988 CIN: L24299MH1977PLC019982 W: www.glenmarkpharma.com Registered office: B/2, Mahalaxmi Chambers, 22 Bhulabhai Desai Road, Mumbai 400 026 E: complianceofficer@glenmarkpharma.com India Ratings Upgrades Glenmark Pharmaceuticals’ Bank Loans to ‘IND AA+’/Stable; Rates Additional Loans Sep 10, 2026 | Glenmark Pharmaceuticals Ltd | Pharmaceuticals India Ratings and Research (Ind-Ra) has upgraded Glenmark Pharmaceuticals Ltd’s (GPL) long-term bank loans to ‘IND AA+’ from ‘IND AA’ with a Stable Outlook, while affirming the short-term bank loans at ‘IND A1+’. The agency has also rated GPL’s additional bank loans as follows: Details of Instruments Size of Rating Assigned Regulator of Date of Coupon Maturity Rating Instrument Type Issue (INR with Instrument Issuance Rate Date Action million) Outlook/Watch Long-term rating Bank loan upgraded; RBI - - - 18,500 AA+/Stable/IND facilities short-term rating affirmed Bank loan RBI - - - 23,500 AA+/Stable/IND Assigned facilities Analytical Approach Ind-Ra continues to take a fully consolidated view of GPL and its subsidiaries to arrive at the rating, given the strong legal, operational, and strategic linkages among them. Detailed Rationale of the Rating Action The rating upgrade reflects Ind-Ra’s expectation of improved financial visibility at Ichnos Glenmark Innovation (IGI; a 100% subsidiary of GPL) in FY26 and beyond after the ISB 2001 licensing agreement in July 2025. GPL recognised USD560 million from this deal in FY26, out of the total USD700 million received. The balance amount is likely to be received in two instalments of USD70 million each in FY27 and FY28. The transaction is likely to significantly reduce IGI’s dependence on GPL for capital support. Consequently, Ind-Ra believes GPL is unlikely to make any material incremental investments in IGI, supporting its profitability profile and enhancing annual cash flows by around USD70 million over FY27-FY28. The upfront proceeds provide IGI with funding visibility over the next three years, while also creating additional growth capital for GPL’s core business operations. The rating upgrade also reflects a likely improvement in GPL’s operating profitability over FY27-FY30, its diversified business profile, and comfortable credit metrics, led by a strong liquidity position and financial flexibility. The company’s ability to sustain revenue and profitability growth while maintaining comfortable cash flows and ROCE, along with the prudent utilisation of proceeds from the licensing transaction, are key rating monitorables. List of Key Rating Drivers Strengths ISB 2001 deal strengthens GPL’s balance sheet and de-risks innovation spend Strong credit profile Well-diversified business profile Strong revenue growth and EBITDA margin expansion in FY26 Strong recovery in US business likely over FY27-FY30 Despite GST-related channel realignment, robust secondary sales growth in India business Weaknesses Regulatory overhang Detailed Description of Key Rating Drivers ISB 2001 Deal Strengthens GPL’s Balance Sheet and De-risks Innovation Spend: Of the USD700 million upfront payment under the ISB 2001 licensing deal, GPL recognised revenue of USD560 million in FY26, with the rest to be recognised in two instalments of USD70 million each in FY27 and FY28. The transaction transforms IGI into a self-funded biotech entity, significantly reducing its dependence on GPL for capital. GPL’s management highlighted that the upfront cash received from AbbVie Inc. is likely to finance IGI's innovative R&D activities for the next three to four years. The transaction is one of the largest biotechnology licensing deals by an Indian company, despite ISB 2001 in an early stage of development. The agency believes that this deal has strengthened GPL’s balance sheet through the substantial upfront payment. GPL’s 100% subsidiary, IGI, entered an exclusive global licensing agreement with AbbVie for ISB 2001 in July 2025, a first- in-class CD38×BCMA×CD3 tri-specific antibody. The deal carries a total potential value of USD1.925 billion, comprising USD700 million upfront and up to USD1.225 billion in development, regulatory, and commercial milestones, along with tiered double-digit royalties on net sales. Under the agreement, AbbVie holds the exclusive rights to develop, manufacture, and commercialise ISB 2001 in the US, Europe, Japan, and Greater China, while GPL/IGI retains rights across emerging markets. Strong Credit Profile: GPL’s management expects the consolidated net adjusted leverage (net adjusted debt/EBITDA) to remain negative over the couple of years. The agency also expects the net leverage, on a consolidated basis, to remain strong over FY27-FY29, led by healthy operating profitability and significant cash built up on the books. GPL recognised around USD560 million as revenue in FY26 from the AbbVie out-licensing deal for ISB 2001, with the remaining amount to be recognised in coming years. The inflow significantly strengthened GPL's balance sheet and liquidity, helping it achieves a net cash position with zero gross debt at FYE26 while maintaining a healthy cash buffer. The consolidated net adjusted leverage was negative 0.13x in FY26 (FY25: 0.34x) and the interest coverage (EBITDA/gross interest) was 21.9x (11.4x). Ind-Ra has factored in a capex of INR9 billion in FY27 (FY26: INR13.6 billion; FY25: INR7.5 billion). Furthermore, the EBITDA margin is likely to improve in FY27, driven by a moderate R&D spend (7%-8% of sales vs past five-year average of 9%) including innovative R&D, the ramp-up of Ryaltris (GPL's flagship proprietary respiratory brand) sales, a greater focus on the high-margin India business, niche launches in the US market with stable pricing pressure, and positive operating leverage in the Europe and Latin America markets. Well-diversified Business Profile: GPL is a strong and consistent player in the domestic formulation business, with higher sales contribution from the chronic segment (58% of India business), which offers steady income and higher margins. After divesting its active pharmaceutical ingredient (API) business, GPL is generating all its revenue from the formulations segment. The company generated 45% and 60% of its consolidated sales from the regulated markets (US and Europe) and 55% and 40% from the semi-regulated markets (India and rest of the world (RoW)) in FY25 and FY26, respectively. GPL has a large pipeline for the US market, with 278 abbreviated new drug application (ANDA) filings, of which 225 have been approved by the US Food and Drug Administration (USFDA). GPL’s 53 ANDAs are awaiting approval, of which 26 are Paragraph IV applications. The company’s spent around 9% of sales on R&D over FY22-FY26 (FY26: 7.5%), higher than the average R&D spend of its peers. Strong Revenue Growth and EBITDA Margin Expansion in FY26: GPL’s management expects a revenue of INR170 billion-180 billion and an EBITDA margin of 21%-22% in FY27. The EBITDA margin is likely [Showing first 8,000 characters — download PDF for full document]