Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Glaxo SmithKline Pharma - Results affected by supply constraints - Centrum

Posted On: 2013-05-12 20:32:13

Glaxo SK Pharma's (GSK) results for Q1CY13 were below our expectations for revenues and margin but in line for net profit. The company reported 1%YoY growth in revenues, 580bps decline in EBIDTA margin and 8%YoY decline in net profit before EO items. Sales during the quarter were affected by supply constraints. GSK is a debt-free company with cash/share of Rs244. We expect the growth momentum to be maintained from new products, vaccines and specialty products. We have lowered our CY13 and CY14 estimates by 7% each. We have changed GSK's rating from Buy to Neutral with a revised target price of Rs2,364 (based on 24x June'14 EPS of Rs98.5).

- Flat growth in core business: GSK reported 1%YoY growth in revenues from Rs6.29bn to Rs6.37bn. The core pharma business was flat during the quarter. Sales during the quarter were impacted by supply constraints at Nashik factory, sites for contract manufacturing and vaccines. The management expects supplies to normalise by the end of Q2CY13.

- Overall increase in cost affects margin: GSK's EBIDTA margin declined by 580bps YoY from 32.1% to 26.3% due to the increase in overall cost. The company's material cost increased by 120bps from 41.7% to 42.9% of revenues due to the rise in imported raw material cost and depreciating rupee. GSK's personnel cost grew by 210bps from 10.3% to 12.4% due to flat sales growth. Other expenses increased by 240bps from 15.9% to 18.3% of revenues due to lower sales growth.

- Major brands growing well: As per IMS MAT-March'13 data, GSK's five major brands reported higher than the market growth of 10.1% namely: Augmentin 11.2%, Zinetac 22.1%, Calpol 20.6%, Eltroxin 29.0% and Neosporin 11.8%. We expect these brands to drive future growth.

- Effect of NPPP: GSK is likely to get impacted by Rs1.65bn in revenues due to the implementation of NPPP as its major brands are currently priced higher than the ceiling price of all brands having more than 1%MS. GSK is likely to get majorly affected for Augmentin, Zentel, Cetzine and Fortum.

- Valuations: We expect GSK to benefit from growth in domestic market and introduction of new products. We have lowered our EPS estimates for CY13 and CY14 by 7% each in view of the flat revenues during the quarter. At the CMP of Rs2,398 the stock trades at 26.4x CY13E EPS of Rs90.8 and 22.6x CY14E EPS of Rs106.2. We have revised the rating from Buy to Neutral with a revised target price of Rs2,364 (based on 24x June'14 EPS of Rs98.5) with 11.4% downside from the CMP.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

BUY Sanghvi Movers: AnandRathi Institutional Research
BUY Inox Leisure: AnandRathi Institutional Research
Punjab National Bank 3QFY2016 Results: Angel Broking
Dr Reddys Labs 3QFY2016 Results: Angel Broking
PNC Infratech 3QFY2016 Results: Angel Broking
BUY Gabriel India: AnandRathi Institutional Research
Ipca Labs 3QFY2016 Results: Angel Broking
BUY PVR - Robust operating performance; Buy with a target price of Rs 983 - AnandRathi
MT Educare - 3QFY2016 Result Update - Angel Broking
Radico Khaitan - 3QFY2016 Result Update - Angel Broking
Eicher Motors - 4QFY2016 Result Update - Angel Broking
Goodyear India 4QFY2016 Results: Angel Broking
Amara Raja Batteries - 3QFY2016 Result Update - Angel Broking
Automobile Sector Monthly Update - LCV recovery accelerates; PVs under pressure - January 2016 - Angel Broking
Indoco Remedies - 3QFY2016 Result Update - Angel Broking
Larsen & Toubro - 3QFY2016 Result Update - Angel Broking
Alembic Pharma - 3QFY2016 Result Update - Angel Broking
Yes Bank - 3QFY2016 Result Update - Angel Broking
Maruti Suzuki - 3QFY2016 Result Update - Angel Broking
Power Grid Corporation of India - 3QFY2016 Result Update - Angel Broking
UltraTech Cement - 3QFY2016 Result Update - Angel Broking
Hindustan Media Ventures - 3QFY2016 Result Update - Angel Broking
Hindustan Zinc - 3QFY2016 Result Update - Angel Broking
Linc Pen & Plastics Ltd (LPPL) 3QFY2016 Results: Angel Broking
Sadbhav Engineering Ltd 3QFY2016 Results: Angel Broking
Buy Neuland Labs: AnandRathi Institutional Research
Radico Khaitan 3QFY2016 Results - Earnings outperform, top-line flat YoY - Angel Broking
Dishman Pharma 3QFY2016 Results: Angel Broking
Lupin 3QFY2016 Results: Angel Broking
Eicher Motors 4QFY2016 Results: Angel Broking
Buy Escorts: AnandRathi Institutional Research
Cadila Healthcare 3QFY2016 Results: Angel Broking
Tata Steel 3QFY2016 Results - EBITDA disappoints led by poor performance in Europe - Angel Broking
Views on Visaka Industries 3QFY2016 Result: Angel Broking
Views on Sanofi India 4QCY2015 Results: Angel Broking
Views on Bajaj Auto 3QFY2016 Results: Angel Broking
BUY Aegis Logistics: AnandRathi Institutional Research
BUY Century Plyboards: AnandRathi Institutional Research
Views on Transport Corporation of India Ltd 3QFY2016 Result: Angel Broking
Views on Tech Mahindra 3QFY2016 Results: Angel Broking
BUY Indoco Remedies - AnandRathi Institutional Research
Buy IRB Infrastructure : AnandRathi Institutional Research
Buy Granules India: AnandRathi Institutional Research
Views on Blue Star 3QFY2016 Results: Angel Broking
Views on Larsen & Toubro 3QFY2016 Results: Angel Broking
Views on United Phosphorus Ltd 3QFY2016 Results: Angel Broking
Views on Indoco Remedies 3QFY2016 Results: Angel Broking
Views on Yes Bank 3QFY2016 Results: Angel Broking
Views on TVS Motors Company 3QFY2016 Results: Angel Broking
Views on Maruti Suzuki India Ltd 3QFY2016 Results: Angel Broking


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2014