GlaxoSmithKline Pharmaceuticals Ltd - Margin pressure to continue - Maintain Reduce - Emkay

Reco: Reduce
CMP: Rs 2100
Target Price: Rs 1963

- GSK Pharma Q2CY12 results: a) Revenues at Rs6.6bn (up 15% YoY) b) EBITDA at Rs2.2bn (up 7% YoY) and c) APAT at Rs1.7bn (up 12% YoY).

- Revenue growth was driven by 56% growth in Vaccines and 14% growth in derma segment. Top 10 brands which contribute 45% to the top-line grew 12% YoY.

- Going forward, growth will come from vaccines such as Synflorix, Cervarix, Tykerb and Rotarix. Speciality biz growth will come from launches in CVS, CNS & derma therapies.

- Govt.'s proposed price control policy will remain an overhang on the stock - Maintain Reduce with a target price of Rs1,963 (22x average of CY12/13E EPS of Rs89).

Source : Equity Bulls

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