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

GlaxoSmithKline Consumer - 3QFY17 Result Update - Weak Demand Accentuated by Demonetization - Reliance Securities

Posted On: 2017-02-16 21:50:44

GlaxoSmithKline Consumer Healthcare (GSK Consumer) has delivered a weak performance in 3QFY17. Its net sales fell by 11.7% to Rs8.2bn, while net profit decreased 8.3% YoY to Rs1.4bn. Marred by demonetization and weak consumer demand environment, its volumes in the core HFD segment fell by 17% in the quarter.

Trimming down our earnings estimate by 7% for FY18E in the wake of poor quarterly performance, we expect GSK Consumer to post modest revenue and earnings CAGR of 2.9% and 6% respectively through FY16-18E. However, considering the Company's market leadership, strong brands and comfortable valuations, we maintain our BUY recommendation on the stock with revised Target Price of Rs5916, which implies an upside of 16% from current levels.

Demonetisation Drags Growth

Overall quarterly volumes declined by 17% YoY, which is attributable to rippling effects of demonetization as the HFD category being discretionary in nature has a higher ticket size compared to conventional FMCG products. Close to half of GSK Consumers' sales come from rural and wholesale channel, which were significant impacted by liquidity crunch post demonetization. The Company supported the trade channels by extending credit and reducing inventory to tide over the crisis situation.

Lower A&P Aid Margins

The Company has largely been able to maintain its overall market shares of ~70%. While Horlicks and its variants have gained market share, Boost has witnessed marginal fall in the same period. Gross margins declined by 110bps YoY to 66.3%, mainly due to higher salience of sachets and commodity inflation. While employee cost remained flat at 13% of sales, A&P spends declined by 220bps YoY to 11.2% of sales. Resultant EBITDA margins rose marginally by 20bps YoY to 15.7%.

Outlook & Valuation

Although, GSK Consumer has had a rough ride in the past two years, we believe that it could recover, going forward on the back of its market leadership, strong brands, increased salience of sachets, improved penetration in North & East and higher pricing power. We expect GSK Consumer to post revenues of Rs39.4bn and Rs43.5bn and net profit of Rs6.9bn and Rs7.6bn in FY17E and FY18E, respectively. Based on expected EPS of Rs180.9, the stock currently trades at 28.2x FY18E earnings. We maintain our BUY recommendation on the stock with revised Target Price of Rs5916, based on 30x Dec-18 EPS.

Shares of GLAXOSMITHKLINE CONSUMER HEALTHCARE LTD. was last trading in BSE at Rs.5118 as compared to the previous close of Rs. 5115.3. The total number of shares traded during the day was 350 in over 128 trades.

The stock hit an intraday high of Rs. 5118.35 and intraday low of 5035. The net turnover during the day was Rs. 1775489.


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:

Simplex Infrastructure Ltd - BUY - TP Rs.590 - Result Update - Kotak
MOIL Ltd - ACCUMULATE - TP Rs.265 - Result Update - Kotak
CHHOTA (to) MOTA ideas: Eveready Industries Ltd - BUY - TP Rs.522 - Kotak
Castrol India Ltd - Q2FY18 Result Update - Religare
Minda Corporation - Q2FY18 Result Update - Religare
Mold-Tek Packaging - Q2FY18 Result Update - Religare
The India Cements Ltd - BUY - TP Rs.223 - Result Update - Kotak
Tata Motors - BUY - TP Rs.514 - Result Update - Kotak
Ashok Leyland - ACCUMULATE - TP Rs.126 - Result Update - Kotak
Oil India Ltd - ACCUMULATE - TP Rs.381 - Result Update - Kotak
Sun TV Network - REDUCE - TP Rs.878 - Result Update - Kotak
Larsen & Toubro - ACCUMULATE - TP Rs.1337 - Result Update - Kotak
Voltas - ACCUMULATE - TP Rs.610 - Result Update - Kotak
Allcargo Logistics - BUY - TP Rs.205 - Result Update - Kotak
Mahindra & Mahindra - BUY - TP Rs.1604 - Result Update - Kotak
Motherson Sumi Systems Ltd - SELL - TP Rs.342 - Result Update - Kotak
MRPL - ACCUMULATE - TP Rs.138 - Result Update - Kotak
Mold-Tek Packaging - ACCUMULATE - TP Rs.337 - Result Update - Kotak
NMDC Ltd - REDUCE - TP Rs.130 - Result Update - Kotak
Time Technoplast Ltd - BUY - TP Rs.214 - Result Update - Kotak
Nagarjuna Construction - BUY - TP Rs.107 - Result Update - Kotak
The Phoenix Mills Ltd - BUY - TP Rs.594 - Result Update - Kotak
Sterling Tools Ltd - BUY - TP Rs.350 - Result Update - Kotak
Delhi takes a giant stride towards curbing vehicular pollution: Angel Broking
Mirza International - REDUCE - TP Rs.173 - Result Update - Kotak
Indraprastha Gas - SELL - TP Rs.291 - Result Update - Kotak
Mahanagar Gas Ltd - SELL - TP Rs.1033 - Result Update - Kotak
Petronet LNG - ACCUMULATE - TP Rs.285 - Result Update - Kotak
Bajaj Electricals - SELL - TP Rs.335 - Result Update - Kotak
Chhota (to) Mota Ideas - Venky's India Ltd - BUY - TP Rs.3000 - Result Update - Kotak
Va Tech Wabag - BUY - TP Rs.711 - Result Update - Kotak
Chennai Petroleum Corporation Ltd - ACCUMULATE - TP Rs.485 - Result Update - Kotak
Castrol India Ltd - ACCUMULATE - TP Rs.437 - Result Update - Kotak
Shree Cements Ltd - BUY - TP Rs.21913 - Result Update - Kotak
Greenply Industries Ltd - ACCUMULATE - TP Rs.322 - Result Update - Kotak
IRB Infrastructure Developers Ltd - BUY - TP Rs.271 - Result Update - Kotak
Maharashtra Seamless Ltd - BUY - TP Rs.560 - Result Update - Kotak
VIP Industries - ACCUMULATE - TP Rs.325 - Result Update - Kotak
Greaves Cotton Ltd - ACCUMULATE - TP Rs.136 - Result Update - Kotak
Shipping Corporation of India Ltd - ACCUMULATE - TP Rs.110 - Result Update - Kotak
Berger Paints Ltd - REDUCE - TP Rs.265 - Result Update - Kotak
Apollo Tyres Ltd - BUY - TP Rs.278 - Result Update - Kotak
Zensar Technologies Ltd - REDUCE - TP Rs.855 - Result Update - Kotak
VRL Logistics - BUY - TP Rs.450 - Result Update - Kotak
Carborundum Universal Ltd (CUMI) - SELL - TP Rs.318 - Result Update - Kotak
Praj Industries Ltd - REDUCE - TP Rs.80 - Result Update - Kotak
Amara Raja Batteries (AMRJ IN) - Strong performance; maintain BUY - Earnings update - CSEC Research
Arvind Ltd (ARVND IN) - Strong B&R performance, margin pressure continues - Earnings update - CSEC Research
Page Industries (PAG IN) - Results tad below expectation, amidst rich valuation - Earnings update - CSEC Research
Dixon Technologies India ltd Q2 PAT jumps to Rs. 20.70 crore


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

disclaimer copyright © 2005 - 2017