22 October 2018 GSK Pharmas (GLXO) sales declined marginally by ~2% YoY to INR8.2b (our 2QFY18 post GST implementation). Gross margin improved ~230bp YoY (+30bp QoQ) to 57.2%. This is reflective of managements strategy to rationalize its portfolio with an enhanced focus on higher-margin products. EBITDA margin, however, shrank ~270bp YoY to 20.2%, primarily due to higher other expenses (+400bp as % of sales). EBITDA declined ~14% YoY to EBITDA margin contraction and one-time non-operational expense of INR118m on account of restructuring. Adjusted for non-operational 1HFY19, sales stood at INR15.5b (+8% YoY), EBITDA at INR3.1b (+44% YoY) and PAT at INR2.1b (+51% YoY). GLXOs secondary sales grew by a muted ~1% in the quarter, as against 9.6% growth in the Indian Pharmaceutical Market (IPM). According to AIOCD, FDC-related market grew by 2% YoY.