Reduce GlaxoSmithKline Pharmaceuticals: target of Rs 2,600: ICICI Securities

ICICI Securities's research report on GlaxoSmithKline Pharmaceuticals

GlaxoSmithKline Pharmaceuticals’ (GSK) Q4FY25 revenue grew at a slower pace of 4.8% due to slowdown in acute therapy market. Improvement in mix led to 340bps YoY expansion in gross margin while cost savings and productivity improvement fuelled 650bps surge in EBITDA margin. New brands like Nucala and Trelegy clocked sales of INR 1.0bn–1.5bn in FY25 (4% of sales).

Outlook

Management is hopeful of launching its patented oncology brands Zejula and Jemperli in next couple of months. In FY26, revenue growth may be mostly driven by volumes (38% of pharma portfolio under price control) while EBITDA margin may be maintained at 31%. Raise FY26-27E EPS by 2% to factor in better margins. Downgrade to REDUCE on expensive valuation; raise TP to INR 2,600 based on 38x FY27E EPS.