Moneycontrol
Feb 16, 2017 11:28 AM IST | Source: Moneycontrol.com

Hold Glaxosmithkline; target of Rs 5773: Edelweiss

Edelweiss recommended hold rating on Glaxosmithkline with a target price of Rs 5773 in its research report dated February 13, 2017.

Hold Glaxosmithkline; target of Rs 5773: Edelweiss


Edelweiss' research report on Glaxosmithkline


GSK Consumer’s (GSK) Q3FY17 revenue (down 11.7% YoY) came in line, while EBITDA (down 9.5%) and PAT (down 8.3%) slightly surpassed our estimates. Domestic health food drinks’ (HFD) and overall company volumes plummeted 17% YoY.


Outlook


In our view, this also reflects increased competition from Patanjali Powervita, Sri Sri Ojasvita and substitutes such as Hershey’s syrup. Gross margin fell 93bps YoY as commodity prices (especially milk, sugar) have started inching up. A&P spends remained soft yet again—down 26.1% and 213bps YoY as percentage of sales. Maintain ‘HOLD’.

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