ICICI Securities
GSK Pharma (HOLD)
Target: ₹1,578
CMP: ₹1,576
GlaxoSmithKline Pharmaceuticals Limited (GSKP) held a virtual analyst meet to discuss company’s performance.
The company believes its key brands and therapies would continue to grow over the next five years and most of its key brands have outpaced their respective industries and gained market share.
Vaccines remain an important growth area, followed by respiratory. It will also invest in therapies like oncology but that would take time to scale up. Vaccine contributes nearly 23 per cent of revenue and is expected to grow in double digits. It’s imported and has lower margin than the company but it would be supported by cost optimisation.
The company has received the approval for Augmentin ES600, Trelegy and Fluarix Tetra and has filed for Shingrix, Rotarix liquid oral vaccine and Nucala liquid pediatric indication to support growth over long term. In the near term it is focusing on Nucala and Menveo.
It has has witnessed a contraction in the dermatology and anti-infective market as patients defer skin treatment and better hygiene has reduced the acute illness.
GSKP’s exposure only to domestic formulations, strong balance sheet and strong brand equity augur well for the company. Recent correction has made valuations fair, hence we upgrade to ‘Hold’ from ‘Reduce’.