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:

India Auto sales in June 2015 - Microsec
Alembic Pharma, Lupin & Sun Pharma get approval for Desvenlafaxine Succinate: Angel Broking
Views on Zydus Cadila receives Market Authorisation (MA) from USFDA for Morphine Sulfate ER Tablets: Angel Broking
India Economy Core infrastructure - Sharp recovery in core, may not be sustainable - Anand Rathi Financial Services
Views on Tech Mahindra - Investor Update: Angel Broking
BUY Welspun India - Anand Rathi Retail Research
BUY Persistent Systems - Anand Rathi Research
Alembic Pharmaceuticals - Gets tentative approval from USFDA for Celecoxib: Angel Broking
Views on Tech Mahindra and Circle Health sign 10-year strategic deal: Angel Broking
World financial fears keep Asia firms in holding pattern
India Technology - Tapering growth and volatility weighing on valuations: Anand Rathi Financial Services
Views on Lupin - Board of Directors approve the Fund Raising: Angel Broking
Views on NPPA update: Angel Broking
Views on Aurobindo Pharma gets USFDA approval for Azithromycin: Angel Broking
Balance of Payments - FDI inflows at all-time high: Anand Rathi Financial Sercices
Angel Broking views on US opens probe against TCS, Infosys for H1-B visa violations
Views on SPARC Licenses XelprosTM (Latanoprost BAK-free) to Sun Pharma - Angel Broking
Views on Infosys Update: Angel Broking
Cipla - 4QFY2015 Result Update - Angel Broking
Action Construction Equipment - 4QFY2015 Result Update - Angel Broking
Views on Sun Pharma and AstraZeneca enter into distribution agreement for ticagrelor in India: Angel Broking
India Cements - 4QFY2015 Result Update - Angel Broking
Coal India - 4QFY2015 Result Update - Angel Broking
Larsen & Toubro - 4QFY2015 Result Update - Angel Broking
Gujarat Pipavav Port - 4QFY2015 Result Update - Angel Broking
Surya Roshni - 4QFY2015 Result Update - Angel Broking
Bajaj Electricals - 4QFY2015 Result Update - Angel Broking
Competent Auto - 4QFY2015 Result Update - Angel Broking
Views on Power Grid 4QFY2015 Results - Angel Broking
Views on IPCA Labs 4QFY2015 Results - Angel Broking
Views on Cipla 4QFY2015 Results - Angel Broking
Views on Sun Pharma 4QFY2015 Results - Angel Broking
Views on India Cement 4QFY2015 Results - Angel Broking
Views on Ramco Cement 4QFY2015 Results - Angel Broking
Views on Mahindra & Mahindra 4QFY2015 Results - Angel Broking
Tree House - 4QFY2015 Result Update - Angel Broking
Transport Corporation of India - 4QFY2015 Result Update - Angel Broking
Views on Coal India 4QFY2015 Results - Angel Broking
Tech Mahindra - 4QFY2015 Result Update - Angel Broking
Setco Automotive - 4QFY2015 Result Update - Angel Broking
Views on Bank of India 4QFY2015 Results - Angel Broking
Views on Gujarat Pipavav Port 4QFY2015 Results - Angel Broking
Views on Indoco Remedies 4QFY2015 Results - Angel Broking
MBL Infrastructures - 4QFY2015 Result Update - Angel Broking
Views on Tata Motors 4QFY2015 Results: Angel Broking
Views on Tech Mahindra 4QFY2015 Results - Angel Broking
Inox Wind - 4QFY2015 Result Update - Angel Broking
TVS Srichakra - 4QFY2015 Result Update - Angel Broking
Bajaj Auto - 4QFY2015 Result Update - Angel Broking
Views on CEAT 4QFY2015 Results: Angel Broking


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

disclaimer copyright © 2005 - 2014