Leading brand, vaccine to accelerate development of Glaxo

The company’s power brand continued to drive growth and profitability, with key legacy brands such as Calpol, Augmentin and Ceftum posting strong double-digit growth.

GSK Pharma said that while its promoted brands grew, the third wave of the pandemic hit the vaccines business. This means that the company’s revenue for the quarter from continued operations 808 crore registered a growth of just 2%.

However, there was a strong improvement in profitability from continued operations with EBITDA 197 crore, registering a growth of 8%.

Analysts at ICICI Securities Ltd said profitability was better even after adjusting for transfer of Lodex and Ostocalcium brands to GSK Asia Pvt Ltd, mainly on account of strong margin performance.

Continuing operating EBITDA margin increased 140 basis points year-over-year to 24.2%, while adjusted net profit increased 16.2% year-on-year to 24.2%. 1527 crores.

Analysts at Motilal Oswal Financial Services Limited (MoFSL), citing secondary sales data of AIOCD, said that anti-infectives, pain medicine, dermatology saw a strong growth of 30% with 25%, 12%, 28% respectively of the total sales. up, 29%, 14% YoY respectively in 3QFY22.

Among brands, Calpol in pain medicine saw 47% year-over-year growth. The dermatological products Betnovate N and T-Bact saw an 11% and 18% year-on-year increase, respectively. Anti-Bacterial Augmentin also increased by 48% YoY in 3QFY22.

Strong growth in sales of products in the Rapid category kept the outlook strong for the company. Glaxo is also focusing on introducing new products and increasing its vaccine sales in India. The company said that after this phase of the pandemic ends and schools open across the country, “we are seeing a steady increase in vaccinations”.

“Except for transfer of brands, we expect GSK to post strong growth in both revenue and earnings in FY22, with strong segment and healthy improvement in low base,” said analysts at ICICI Securities Ltd. They expect 7.2% revenue and 17% net profit CAGR. (Compound Annual Growth) Growth in power brands in FY 2011-FY 24 is driven by traction in newly launched products and improvements in key treatments such as vaccines, respirators and vitamins and minerals.

Analysts believe that though the growth outlook remains strong, the valuation of the stock may weigh in on the positives. Unsurprisingly, the stock closed down 2.12% on Tuesday. Feather 1547, the stock is trading at 39 times the FY23 earnings estimates of MOFSL. The brokerage firm maintains a neutral rating on the stock. Analysts at ICICI Securities also point out that the current valuation already captures all the near-term upsides.