GSK Pharma Q2 net may fall 20% at Rs 130.8cr: MOST
Sales of GlaxoSmithkline Pharmaceuticals are expected to increase by 10.8 percent Q-o-Q (up 5.5 percent Y-o-Y) to Rs 705.4 crore, according to Motilal Oswal.
November 11, 2013 / 11:04 IST
Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the pharmaceutical sector. The brokerage house expects GlaxoSmithkline Pharmaceuticals to report a 37.6 percent growth quarter-on-quarter (down 20.1 percent Y-o-Y) in net profit at Rs 130.8 crore.
Sales of GlaxoSmithkline Pharmaceuticals are expected to increase by 10.8 percent Q-o-Q (up 5.5 percent Y-o-Y) to Rs 705.4 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 36 percent Q-o-Q (down 22.3 percent Y-o-Y) to Rs 154.6 crore.Motilal Oswal's Report on GlaxoSmithkline Pharmaceuticals:We expect GlaxoSmithKline Pharmaceuticals (GLXO) to post 6 percent Y-o-Y growth in 3QCY13 sales to INR 7.05 billion.EBITDA is likely to decline by 22 percent Y-o-Y to INR 1.55 billion. EBITDA margin is expected to decline 7.9 percent to 21.9 percent, which we believe will be impacted by supply chain related issues highlighted in 1QCY13.We expect adjusted PAT to decline 20 percent Y-o-Y to INR 1.31 billion in 3QCY13, in line with EBITDA decline, due to subdued operational performance.Performance for 1QCY13 was impacted by supply chain related issues, some of which were expected to get resolved by 3QCY13. While some of these factors are temporary in nature, we believe the normalization in margins will be gradual.Glaxo deserves premium valuations due to strong parentage (giving access to large product pipeline), brand-building ability and likely
positioning in post patent era. It is one of the few companies with the ability to drive reasonable growth without any major capital requirement, leading to high RoCE of 45-50 percent.The stock trades at 38.7x CY13E and 30.6x CY14E EPS.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
