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Glaxosmithkline Pharma Ltd Research Report - 04th Aug 2016

Pharmaceutical | Published on Aug 04th 2016

IT

For 1QFY2017, sales stood at Rs685cr V/s Rs700cr expected and V/s Rs622cr in 1QFY2016, a yoy growth of 10.2%. The sales growth has been impacted on back of the pricing cuts implemented by the government. On the operating front, the OPM came in at 10.2% V/s 16.7% in 1QFY2016 and V/s 17.0% expected. The company’s OPM was impacted by other expenses, which grew by 40.5% yoy. Thus, the company posted an Adj. net profit of Rs71cr V/s Rs95cr in 1QFY2016, a yoy de-growth of 25.2%. We maintain our Neutral rating. Results below expectations: For 1QFY2017, sales stood at Rs685cr V/s Rs700cr expected and V/s Rs622cr in 1QFY2016, a yoy growth of 10.2%. The sales growth has been impacted on back of the pricing cuts implemented by the government. On the operating front, the OPM came in at 10.2% V/s 16.7% in 1QFY2016 and V/s 17.0% expected. The company’s OPM was impacted by other expenses, which grew by 40.5% yoy. Thus, the company posted an Adj. net profit of Rs71cr V/s Rs95cr in 1QFY2016, a yoy de-growth of 25.2%.. Outlook and valuation: The company has a strong balance sheet with cash of ~Rs2,000cr, which could be used for future acquisitions or higher dividend pay outs. On the operational front, we expect the company’s net sales to post a CAGR of 13.4% to `3,527cr and EPS to register a mere CAGR of 15.9% to Rs59.4 over FY2016–18E. We remain Neutral on the stock.

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CMP 3,139
Target Price
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)23,145.12
MCAP NSE (Rs in Cr)23,203.14
P/E (x)66.76
EPS (Rs.)40.93
BV (Rs.)219.95
Div Yield (%)1.83
FV (Rs.)10.00
P/BV (x)12.42
EV/Sales (x)8.00
EV/EBITDA (x)69.00

Shareholding Pattern (%)

Promoter75.0
Public & Others12.0
Institution10.0
Foreign2.0
Corporate1.0
Grand Total100.0

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