GlaxoSmithKline Pharma Results below expectations - Maintain Hold :Emkay

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GlaxoSmithKline Pharma

Results below expectations - Maintain Hold

HOLD

CMP: Rs2,122                                        Target Price: Rs2,161

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n     GSK Pharma Q2CY11 results were below expectations with a) Revenues at Rs5.7bn (up 13% YoY) b) EBITDA at Rs2bn (up 4% YoY) and c) APAT at Rs1.5bn (up 9% YoY)

n     Revenue growth was driven by 14% growth in the domestic formulations business led by anti-infective, dermatology, vaccines & 4 new launches (2 in oncology segment)

n     EBITDA margins declined 295bps to 34.7%, due to 133bps contraction in gross margins & 100bps increase in staff cost

n     Maintain Hold on the stock with a target price of Rs2,161