Deutsche Bank has put buy rating on GlaxoSmithKline Consumer Healthcare as the government is considering a lower Good and Service Tax (GST) rate for malted food drinks, which get sold in small unit packs as it is consumed by mid-low income groups.
The research firm says, if lower GST rate get implemented, then it will be a net positive for the company as it can drive penetration-led growth and it will also give the company a breather in correcting the price-value equation.
The stock is trading at 26x FY2019 earnings and it has underperformed Sensex by 27 percent and 4 percent over last one and three years and Deutsche Consumer basket by 32 percent and 52 percent respectively,” the research firm said.
The firm has a price target of Rs 6500 over the next 12 months.
At 11:26 hrs GlaxoSmithKline Consumer Healthcare was quoting at Rs 5370, up Rs 2.05, or 0.04 percent on the BSE.
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