Hold GlaxoSmithKline Consumer Healthcare; target of Rs 7972: Prabhudas Lilladher

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Prabhudas Lilladher's research report on GlaxoSmithKline Consumer Healthcare

We believe GSK will face near term pressures given 1) just 4% domestic volume growth in 1Q 2) high single digit inflation due to SMP and Barley prices rising by 40% and 30% YoY and 3) reluctance to pass on higher input costs (<1% price increase in July) and next round of increase likely in Jan'20. Though GSK has been aggressive in cost savings in ad-spends and increasing efficiencies, we believe gross margin expansion from the current high base looks unlikely. Moreover, the volume share gain is led by 1) 14% growth in sachets and 2) 13% increase in distribution (2mn outlets now) which has masked the slowdown impact, despite discretionary nature of category. Although GSK has gained 230bps volume market share in 1Q, value share gain has been lower, indicating significant push based strategy.

Outlook

We estimate 11.6% sales CAGR over FY19-21 and value GSK on the basis of our HUL's target price and swap ratio (4.39 HUL shares of Rs 1 each for each GSK share) and arrive at a target price of Rs7972. Retain "Hold".

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More