Glaxo Pharma falls over 3% as brokerages maintain bearish stance on weak margin, rich valuations

GSK Pharma | Company reported lower profit at Rs 76.5 crore in Q2FY21 compared to Rs 502.7 crore, revenue fell to Rs 879 crore from Rs 882 crore YoY.

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26 Aug, 2025 12:21

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GlaxoSmithKline Pharmaceuticals stock fell 3.5 percent intraday on Tuesday as brokerage houses maintained bearish stance on the stock after weak earnings in September quarter.

IDFC Securities has retained underperformer rating on the stock with a target price at Rs 1,185, implying potential downside of 14 percent. "Rich valuations and limited near-term triggers will cap upside," it said.

Glaxo begun to show signs of turning the corner by clocking double digit revenue growth, but gross margin was lower.

Citi, which also maintained its sell rating with a target price of Rs 1,340 (implying potential downside of 2 percent), said the business is clearly recovering, but it does not see margins back at 30 percent range.

Current valuations leave very little buffer for any potential risks, it feels.

GSK Pharma has reported a 23 percent on year decline in profit to Rs 101 crore for the quarter ended September 2018, dented by revenue, operational performance and exceptional outflow of Rs 11.8 crore in Q2.

Revenue during the quarter slipped 2.4 percent to Rs 816.3 crore compared to year-ago. EBITDA (earnings before interest, tax, depreciation and amortisation) declined 14 percent to Rs 165.2 crore and margin contracted 280 basis points to 20.2 percent YoY.

However, profit for the first half of FY19 grew by 20.8 percent year-on-year to Rs 189.36 crore and revenue increased 7.5 percent to Rs 1,552 crore. EBITDA jumped 44.2 percent to Rs 305.5 crore and margin expanded 500 bps to 19.7 percent YoY.

At 11:24 hours IST, the stock was quoting at Rs 1,359.10, down Rs 31.45, or 2.26 percent on the BSE.