GSK Consumer Healthcare - Mixed Q1; rich valuations limit upside HOLD - Religare

GSK Consumer's Q1CY13 net sales/EBITDA/adj. PAT grew 15.6%/5.6%/18.5% YoY, even as high A&P costs pulled down EBITDA margins by 170bps. Volumes were up 8%YoY, with the momentum likely to sustain over the medium term. Benign input cost inflation would lead to a 50bps margin expansion over CY12-14, thus supporting a 20% earnings CAGR over this period. However, valuations (33.2x/28.1x CY13/14) are rich, leaving limited room for upsides. Maintain Hold with a Mar'14 TP of Rs. 3875.

Source : Equity Bulls

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