Hold GlaxoSmithKline Pharmaceuticals: target of Rs 2640: ICICI Securities

hold

ICICI Securities's research report on GlaxoSmithKline Pharmaceuticals

GlaxoSmithKline Pharmaceuticals’ (GSK) Q1FY25 result was ahead of our expectations driven by mixed improvement and curb in overhead cost. Pharma portfolio (79% of sales) grew 10% YoY led by volume uptick in Ceftum (+45%), Augmentin and Calpol. Vaccine portfolio (21% of sales) grew 8% YoY driven by Havrix and Boostrix. Nearly 450 MRs of GSK had opted for VRS in Dec’23, benefit of which is now visible in curbing its overhead cost (down 10% YoY). GSK is in final stages of charting a roadmap to launch NCE oncology brands like Zejula and Jemperli in FY25.

Outlook

Management aims to maintain growth momentum and EBITDA margin of 28-29% in FY25. We raise our FY25/26E EPS by 8%/11% to factor in better margin performance. Maintain HOLD with higher TP of INR 2,640 (INR 2,385 earlier) on 45x FY26E EPS.

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