Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Largely in-line with estimates
GSK Pharma’s Q4CY11 results were largely in-line with our
estimates. The net sales grew by 15.4% YoY to Rs5.6bn on back
of revival in the anti-infective and mass markets. The company
also witnessed strong traction in speciality and vaccine segment.
The gross margins contracted by 372bps YoY due to escalation in
the raw material costs. However, EBITDA margins were in-line
with our estimates at 31.5%, as the lower SG&A costs offset the
impact of contracted gross margins. Consequently, the net profit
came in at Rs1.4bn, growth of 20.5% YoY.
We maintain our ‘SELL’ recommendation on back of rich
valuations and the overhang of the proposed NPPP-2011. We
value the company at 22x one year forward earnings with a
Target Price of Rs1,880.
Revival in key segments boost growth
GSK Pharma reported net sales of Rs5.6bn up 15.4%YoY, in- line with our
estimates, backed by the revival in the anti-infective and mass market
segments. Further, the company also launched Synflorix-vaccine against
invasive pneumococcal disease during the quarter. The core
pharmaceutical segment clocked growth of 18.2% YoY.
EBITDA margins expand on lower SG&A
The gross margins contracted during the quarter due to escalation in the
raw material costs. However, the impact was offset by the lower SG&A
expense, translating to EBITDA margins of 31.5%, in-line with our
estimates. Subsequently, the reported recurring net profit came in at
Rs1.4bn, growth of 20.5% YoY.
NPPP-2011 remains an overhang
The proposed NPPP-2011 policy, which entails to bring more than 60%
of the domestic drugs under price control on back of market based
pricing, still remains unclear and would negatively impact GSK Pharma.
We expect key brands such as Augmentin and Calpol to be impacted by
the policy.
VALUATIONS AND RECOMMENDATION
The stock is trading at an expensive valuation of 25.3x CY12E and 22.3x
CY13E earnings. We maintain our ‘SELL’ recommendation on the stock
on back of rich valuations and the overhang of the proposed NPPP-2011.
We value the company at 22x one year forward earnings with a Target
Price of Rs1,880.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Largely in-line with estimates
GSK Pharma’s Q4CY11 results were largely in-line with our
estimates. The net sales grew by 15.4% YoY to Rs5.6bn on back
of revival in the anti-infective and mass markets. The company
also witnessed strong traction in speciality and vaccine segment.
The gross margins contracted by 372bps YoY due to escalation in
the raw material costs. However, EBITDA margins were in-line
with our estimates at 31.5%, as the lower SG&A costs offset the
impact of contracted gross margins. Consequently, the net profit
came in at Rs1.4bn, growth of 20.5% YoY.
We maintain our ‘SELL’ recommendation on back of rich
valuations and the overhang of the proposed NPPP-2011. We
value the company at 22x one year forward earnings with a
Target Price of Rs1,880.
Revival in key segments boost growth
GSK Pharma reported net sales of Rs5.6bn up 15.4%YoY, in- line with our
estimates, backed by the revival in the anti-infective and mass market
segments. Further, the company also launched Synflorix-vaccine against
invasive pneumococcal disease during the quarter. The core
pharmaceutical segment clocked growth of 18.2% YoY.
EBITDA margins expand on lower SG&A
The gross margins contracted during the quarter due to escalation in the
raw material costs. However, the impact was offset by the lower SG&A
expense, translating to EBITDA margins of 31.5%, in-line with our
estimates. Subsequently, the reported recurring net profit came in at
Rs1.4bn, growth of 20.5% YoY.
NPPP-2011 remains an overhang
The proposed NPPP-2011 policy, which entails to bring more than 60%
of the domestic drugs under price control on back of market based
pricing, still remains unclear and would negatively impact GSK Pharma.
We expect key brands such as Augmentin and Calpol to be impacted by
the policy.
VALUATIONS AND RECOMMENDATION
The stock is trading at an expensive valuation of 25.3x CY12E and 22.3x
CY13E earnings. We maintain our ‘SELL’ recommendation on the stock
on back of rich valuations and the overhang of the proposed NPPP-2011.
We value the company at 22x one year forward earnings with a Target
Price of Rs1,880.
No comments:
Post a Comment