GlaxoSmithKline Pharma - 4QCY2012 Result Update - Angel Broking

GlaxoSmithKline Pharma (Glaxo) reported its 4QCY2012 results, just-in-line with estimates on the top-line and OPM fronts, which came in at Rs. 657cr and 27.2% respectively. The net profit came in at Rs. 159cr, higher than an expected Rs. 132cr, registering a growth of 7.6% yoy. We continue to maintain our Neutral view on the stock.

Just in-line results on sales and OPM front: For 4QCY2012, Glaxo reported a 16.1% yoy growth in its net sales to Rs. 657cr, more or less in line with our estimate of Rs. 680cr. The company's gross margin came in at 57.3%, ie in line with our estimate of 57.4%. This aided the OPM to come in at 27.2% (in line with our estimate of 26.8%) for 4QCY2012. During the quarter, Glaxo reported a growth of 7.6% yoy in its adjusted net profit to Rs. 159cr, higher than our expectation of Rs. 132cr.

Outlook and valuation: We expect Glaxo's net sales to post a 13.0% CAGR to Rs. 3,319cr and EPS to register a 4.1% CAGR to Rs. 86.7 over CY2012–14. At current levels, the stock is trading 27.2x and 24.5x CY2013E and CY2014E earnings, respectively. We remain Neutral on the stock.

Source : Equity Bulls

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