Angel Broking neutral on GlaxoSmithKline Pharmaceuticals

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Angel Broking's report on GlaxoSmithKline Pharmaceuticals

"For 5QFY2015, Glaxo SmithKline Pharmaceuticals’ top-line came in below our expectations, while the net profit came in higher than our expectation. The company posted a growth of 2.3% yoy in sales to Rs 613cr V/s an expected Rs 650cr. On the operating front, the gross margin came in at 57.1% V/s 50.9% in 1QFY2015, thus aiding the OPM to come in at 19.6% V/s 16.3% in the corresponding period of last year, ie a yoy expansion of 312bp. Thus, the Adj. PAT came in at Rs 107cr V/s Rs 96.5cr in 1QFY2015, ie a yoy growth of 10.5%. This is against an expected Adj net profit of Rs 102cr."

"The company has a strong balance sheet with cash of ~Rs 2,000cr, which could be used for future acquisitions or higher dividend payouts. On the operational front, we expect the company’s net sales to post a CAGR of 9.8% to Rs 3,158cr and EPS to register a CAGR of 14.6% to Rs 63.2 over FY2015–17E. We remain Neutral on the stock", says Angel Broking research report.

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