GlaxoSmithKline Pharmaceuticals Ltd. share price target

GlaxoSmithKline Pharmaceuticals (GLXO) delivered lower-than-expected revenue/EBITDA (8%/5% miss) in 1QFY26.

GlaxoSmithKline Pharmaceuticals’ (GSK) Q4FY25 revenue grew at a slower pace of 4.8% due to slowdown in acute therapy market. Improvement in mix led to 340bps YoY expansion in gross margin while cost savings and productivity improvement fuelled 650bps surge in EBITDA margin.

GlaxoSmithKline Pharmaceuticals’ (GSK) Q1FY25 result was ahead of our expectations driven by mixed improvement and curb in overhead cost.

Glaxo Pharma (GLXO) delivered better-than-expected 1QFY25 performance. The robust growth in key brands, young potential brands.

GlaxoSmithKline Pharmaceuticals’ (GSKP) Q1FY24 performance was largely in line with expectations, though EBITDA margin was weaker due to marketing cost of the newly launched Shingrix (herpes zoster vaccine). GSKP’s focus on volume growth forms the crux of its market-approach strategy as pricing pressure forces companies to think differently.

GlaxoSmithKline Pharmaceuticals’ (GSKP) Q4FY23 performance was disappointing with margins taking a hit due to unfavourable mix and price cuts on the NLEM portfolio (42% of sales). GSK’s focus on volume growth forms the crux of its market-approach strategy as pricing pressures force it to think differently.

GlaxoSmithKline Pharmaceuticals’ (GSKP) Q3FY23 performance beat our estimates on the profitability front, led by prudent cost controls. Revenues declined 1.7% YoY to Rs8bn (I-Sec: Rs8.8bn) with slowdown in vaccine sales. EBITDA margins saw strong YoY expansion of 430bps (+50bps QoQ) to 28.5%, largely supported by gross margin expansion and lower ‘other expenses’.

GlaxoSmithKline Pharmaceuticals’ (GSKP) Q2FY23 performance beat our estimates on the profitability front, led by prudent cost controls. Revenue (excluding divested brands) declined 1.8% YoY to Rs9.2bn (I-Sec: Rs9.6bn).

Company believes its key brands and therapies would continue to grow. It has been able to maintain its market share in key brands and expects to improve on it gradually.

GSK Pharma (GLXO) delivered in-line 3QFY22 earnings after including profits from discontinued operations. While the pharma portfolio tracked doubledigit growth, it was offset to some extent by the lower off-take of vaccines because of the third COVID wave. With COVID receding, we expect a gradual revival in the vaccine business. We have tweaked our EPS estimates for FY22/FY23/24 by 2% to factor in :a) an improved outlook for the vaccine business, b) a better traction in brands...

Revenue grew 22% YoY to INR7.9b (est. INR8.1b), led by Dermatology, AntiInfectives, and Pain/Analgesics segment. Gross margin expanded by 40bp YoY to 61.7% due to better product mix. EBITDA margin expanded at a higher rate (160bp YoY) to 19% (est. 21.5%) due to better operating leverage, with lower employee cost (down 220bp YoY as a percentage of sales), partially offset by higher other opex (+100bp...

GSK Pharma (GLXO)'s 4QFY21 performance was marginally below estimates, largely led by moderate YoY sales growth for the quarter. Based on AIOCD data, strong growth in the Dermatology segment was offset by a weak performance from the Anti-Infectives and Pain Analgesics segments. We raise our EPS estimates by 6%/7% for FY22E/FY23E, factoring in a) a robust outperformance from Dermatology, b) strong revival in AntiInfectives, Pain Analgesics, and Vitamins/Minerals/Nutrients, partly supported by the opportunity arising from COVID. We continue to value GLXO at 38x 12M forward earnings (25% discount to its three-year average)...

GSK Pharma (GLXO)'s 3QFY21 performance was better than estimated, with an increase in sales driving higher profitability (on account of operating leverage). With the intensity of YoY decline lower over the past two quarters, GLXO exhibited low-double-digit YoY growth with the easing of the lockdown and partly aided by the low base of the past year. We increase our EPS estimates by 8%/3%/2% for FY21/FY22/FY23E, factoring in strong recovery in key therapies and improving productivity. We continue to value GLXO at 38x 12M forward earnings (25% discount to its...

Outlook & Valuation: We downgrade our revenue estimates for FY21E / FY22E by 4.6% / 4.6% to Rs. 32.9 Bn / Rs. 36.3 Bn for FY21E / FY22E. We downgrade our EBITDA margins for FY21E / FY22E by 50 bps to 20.6%/21.9% due to fixed nature of personal cost.