GlaxoSmithKline Consumer Healthcare Ltd. (erstwhile SmithKline Beecham Consumer Healthcare) posted diappointing results for the June quarter. The company posted a never before 26% decline in the topline in 1QFY03. This resulted in the margins getting squeezed and the company finally finished the quarter with a significant 45% dip in bottomline.
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The results have surprised the analyst community. Though the company has not commented on the reasons for the sharp dip in topline, it seems that the dip has more to do with an inventory correction than anything else.
Whatever the reasons, the poor results have shaken investor confidence towards the counter. GlaxoSmithKline Consumer anyway never got higher valuations owing to its one product category focus. The parent's other 100% subsidiary was always a cause for concern. But the blip in quarterly results saw the stock price lose over 13% of value ever since the results were announced.
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The stock is trading at Rs 317, a P/E of 14x annualised 1HFY02 earnings. We are reworking our estimation for FY03 post the surprising 2QFY03 results. Having said that, GlaxoSmithKline Consumer has traditionally had a stable business growth and there seems no reason to suggest that it may not bounce back.
GSK Consumer Healthcare declared results for the quarter ended September 2016. The revenues dropped by 1.3% during the quarter as compared to a year ago; while the profits declined by 16.6% YoY during the quarter.
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