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Last Updated : Feb 23, 2017 05:54 PM IST | Source: Moneycontrol.com

Hold Glaxosmithkline Consumer; target of Rs 5300: Axis Direct

Axis Direct recommended hold rating on Glaxosmithkline Consumer with a target price of Rs 5300 in its research report dated February 21, 2017.

 
 
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Axis Direct's research report on Glaxosmithkline Consumer


Despite a low base, net sales declined 12% with HFD volumes declining 17%. Consumer off-take declined 7% while inventory in trade channel was down 5% YoY. Gross margin declined 110 bps YoY due to RM cost inflation. Cost saving initiatives and 26% lower A&P spend led to 40 bps increase in OPM. PAT declined 10% YoY.


Outlook


Management intervention is still tactical and largely limited to sachet pricing, as the company rolled pricing of Rs 6 sachet back to Rs 5 and introduced the Rs 10 satchet. We cut our FY17/18 EPS estimate by 6%/ 7%. Maintain HOLD with revised TP of Rs 5,300, based on forward P/E of 27x.

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First Published on Feb 23, 2017 05:54 pm
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