GSK Pharma a market performer: Karvy

Karvy Stock Broking has upgraded GlaxoSmithKline Pharmaceuticals as a market performer with price target of Rs 1215 in its February 27, 2009 research report “Revenues for the quarter were up by 8.1% to Rs 3749 million. The company’s prority products and vaccines grew by 10%. Operating margins for the quarter were down marginally from 30.4% to 29.7%.was mainly on account of higher staff costs. Profits for the quarter were higher by 11.5% to Rs 892 million while reported profits rose from Rs 809 million to Rs 2085 million. The rise in reported profits was on account of profit on sale of investments net of actuarial provision of employee benefits.”

“The company launched three products in CY 2008 which include Tykerb, Rotavirus and Olmesartan. In CY 09, the company plans to launch an Mycamine, Eltrombopag (anti platlet), Synflorix a Strepto Pneumonia vaccine and Rezonic. The company has multiple engines of growth Branded generics, Vaccines, Rural marketing and In-licensing. We believe these new initiatives should fructify from CY 2011 and company should clock higher growth in revenues. We marginally upgraded our EPS by 1.2% to Rs 61.5 for CY 2009E. On account of high return ratios and earnings growth of 16 % in CY 2009 we upgrade our price target by 1.2% to Rs 1215 based on 19.8x CY 2009E,” says Karvy Stock Broking’s research report.

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