GlaxoSmithKline Pharma - 5QFY2015 Result Update - Angel Broking

For 5QFY2015, Glaxo SmithKline Pharmaceuticals' top-line came in below our expectations, while the net profit came in higher than our expectation. The company posted a growth of 2.3% yoy in sales to Rs. 613cr V/s an expected Rs. 650cr. On the operating front, the gross margin came in at 57.1% V/s 50.9% in 1QFY2015, thus aiding the OPM to come in at 19.6% V/s 16.3% in the corresponding period of last year, ie a yoy expansion of 312bp. Thus, the Adj. PAT came in at Rs. 107cr V/s Rs. 96.5cr in 1QFY2015, ie a yoy growth of 10.5%. This is against an expected Adj net profit of Rs. 102cr. We maintain our Neutral rating on the stock.

Results below our expectations on sales : On the sales front, the company posted a growth of 2.3% yoy to Rs. 613cr V/s an expected Rs. 650cr. On the operating front, the gross margins came in at 57.1% V/s 50.9% in 1QFY2015, thus aiding the OPM to come in at 19.6% V/s 16.3% during the corresponding period of last year, ie an yoy expansion of 312bp. Thus, the Adj. PAT came in at Rs. 107cr V/s Rs. 96.5cr in 1QFY2015, ie a yoy growth of 10.5%. This is against an expected Adj net profit of Rs. 102cr.

Outlook and valuation: The company has a strong balance sheet with cash of ~Rs. 2,000cr, which could be used for future acquisitions or higher dividend payouts. On the operational front, we expect the company's net sales to post a CAGR of 9.8% to Rs. 3,158cr and EPS to register a CAGR of 14.6% to Rs. 63.2 over FY2015-17E. We remain Neutral on the stock.

Shares of GLAXOSMITHKLINE PHARMACEUTICALS LTD. was last trading in BSE at Rs.3195.85 as compared to the previous close of Rs. 3203.95. The total number of shares traded during the day was 683 in over 168 trades.

The stock hit an intraday high of Rs. 3230 and intraday low of 3190. The net turnover during the day was Rs. 2188622.

Source : Equity Bulls

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