2026-04-15 19:57:40
Latest Post
Paras Defence and Space Technologies Ltd inks agreement with Northstar
Antony Waste Handling Cell Limited: A Milestone Year of Growth and Innovation
Globe Civil Projects Limited Announces Strong Execution Momentum and Robust Order Book
TCS and University of Cincinnati Announce 'My First AI Job' Program to Prepare Students for Entry-Level AI Careers
RateGain Launches FIFA World Cup 2026 Market Pulse Dashboard for Real-Time Travel Demand Insights Across 16 Host Cities
Research
GSK Consumer Healthcare - "The Great Portfolio Nourisher" - Shah Investor's Home
Posted On : 2012-10-01 21:41:02( TIMEZONE : IST )
GlaxoSmithKline Consumer Healthcare Ltd. (GSK), the market leader in malted food drinks (MFD) category with ~70% market share in India. Its flagship brands Horlicks and Boost grew impressively at double digit sales growth (~20% CAGR) in last five years (CY07-11). GSK enjoys strong pricing power in MFD segment as key players like Nestle, HUL and Dabur have either exited or are dormant in the segment. We expect GSK to deliver 16% revenue and 19% earnings growth (CAGR) over CY11-14E supported by growth strategy based on nutrition, widening distribution reach, and expanded product portfolio.
Under penetrated market; Opportunity for growth
The Malted Food Drinks (MFD) category provides opportunity for growth as it remains under penetrated market at 22% level with 11% in rural markets and 40% in urban markets. Also, penetration level is more skewed towards South and East India (45% level), while in North and West remains fairly low (10% level). Rural markets provide long term opportunity for the company with low penetration level.
Market Leader
GSK Consumer Healthcare Ltd. dominates the Indian malted food category with ~70% market share with its flagship brands like Horlicks (100+ year old brand), Boost, Maltova and Viva. Horlicks is the strong brand in white HFD and also had 54% market share in MFD market. Boost and Maltova are also strong brand in brown HFD and had combined 14% market share in MFD market.
Outlook & Valuation
GSK, with ~70% market share in HFD, is a good play on the India's food and processing industry (Consumption story). Also, an important trend during the current scenario is the rising health consciousness among consumers. With the prime value proposition of health and nutrition, GSK is strongly positioned to cater to this need.
At CMP, GSK trades at 28.8x P/E based on CY13E EPS of Rs.118.4 vs. 25.3x P/E on FY14E EPS of its peers due to 18.4% EPS CAGR over CY11-FY13E vs. 16.8% CAGR of the FMCG universe likely over FY12-14E. Dividend yield stands at 1.4%, at CMP assuming similar dividend payout ratio in CY12. We estimate a target Price of Rs.3240 which 27.4x CY13E EPS of Rs.118.4, upside potential of 11%. We initiate with "BUY" rating.
