A weak dose from SmithKline Pharma - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

A weak dose from SmithKline Pharma

Feb 25, 2000

SmithKline Pharmaceutical has reported disappointing results for the year ended December 1999. However, they are in line with the developments that took place during the year.

(Rs m) 1999 1998 Change
Sales 3,247.9 2,950.2 10.1%
Other Income 47.6 52.0 -8.5%
Expenditure 3,007.1 2,568.3 17.1%
Interest 10.4 3.9 165.2%
Depreciation 27.3 18.0 51.5%
Profit before Tax 335.7 495.6 -32.3%
Tax 88.5 163.0 -45.7%
Profit after Tax/(Loss) 247.1 332.6 -25.7%
Net profit margin (%) 7.6% 11.3%  

First of all during the budget the government imposed an import duty of 38.5% on Engerix (the Hepatitis B vaccine that the company produces). The company took a hit on the margins rather than increasing the price of the vaccine. The growth of Engerix (which grew by 74% in 1998) was also affected due to competition from the likes of Shanta Biotech (which tied up with Pfizer for marketing).

Besides, Zevit (B complex vitamin) which contributes around 15% of the turnover was also was also brought under price control during the year. The company was forced to reduce the prices of the product by almost 50%. This hit the turnover and the margins further.

The company’s flagship over the counter brand (Iodex) has also recorded less than anticipated growth due to competition from the likes of ‘Moov’ and ‘Tiger Balm’. What has actually saved the topline is the continuing growth in Augmentin. This product contributed more than 10% of the company’s turnover during the current year.

The other product which have done well include Havrix and Varilix, the two other vaccines from the parent’s stable which have grown well and now contribute almost 15% of the company’s turnover. These are expected to lead the growth in the current year.

Avandia, the parent’s anti–diabetes blockbuster is to be introduced only in the next year i.e. 2001. The vehicle that the parent will use (whether the 100% subsidiary or the listed company) is still open to question.

Equitymaster requests your view! Post a comment on "A weak dose from SmithKline Pharma". Click here!


More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


  • Track your investment in SMITHKLINE PHARMA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks