Angel Broking has maintained neutral rating on GlaxoSmithKline Pharma in its November 16, 2011 research report.
"GlaxoSmithKline Pharma (Glaxo) reported its 3QCY2011 results, which were below our estimates on the top-line and PAT fronts. The company's OPM for the quarter came in at 29.0%, lower than our estimate. We continue to maintain our Neutral view on the stock. For 3QCY2011, Glaxo reported 4.4% yoy growth in its net sales to Rs 608cr, lower than our estimate of Rs 643cr. The company's gross margin came in at 60.0%, lower than our expectation of 63.2%. This led to OPM of 29.0%, below our estimate of 32.4%, for 3QCY2011. During the quarter, Glaxo reported a 7.7% yoy dip in its net profit to Rs 146cr, below our expectation of Rs 162cr, due to lower-than-expected OPM."
"We expect Glaxo's net sales to post a 13.9% CAGR to Rs 2,788cr and EPS to register a 14.6% CAGR to Rs 86.9 over CY2010-12E. At current levels, the stock is trading 27.5x and 22.8x CY2011E and CY2012E earnings, respectively. We continue to maintain our estimates and, hence, remain Neutral on the stock," says Angel Broking research report.
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