MOSL: GSK CONSUMER (Neutral)-Commodity inflation to keep margins in check
GSK Consumer: Commodity inflation to keep margins in check
(SKB IN, Mkt Cap USD4.3b, CMP INR7146, TP INR7470, 5% Upside, Neutral)
- GSK Consumer (SKB) posted 9% YoY sales growth to INR12.9b (v/s est. of INR13.1b) with domestic HFD volume growth of 6.5% YoY. EBITDA grew 27.4% YoY to INR3.2b (v/s est. of INR2.8b); adj. PAT grew 21.4% YoY to INR2.6b (v/s est. of INR2.3b).
- Value market share (MAT Mar’19) for Horlicks stood at 42.9% (down 140bp YoY and 10bp sequentially) while value market share for Boost stood at 10.7% (down 50bp YoY and 10bp sequentially). Volume market share (MAT Mar’19) for Horlicks and Boost stood at 49.5% and 14%, respectively.
- Gross margin expanded 160bp YoY to 70%. Higher staff costs and ad spends as % of sales (up 120bp and 50bp YoY, respectively) were offset by a sharp decline in other expenses as % of sales (down 360bp YoY to 17.5%) due to some one-off in the base quarter. Thus, EBITDA margin was up 360bp YoY to 24.8% (v/s est. of 21.6%).
GlaxoSmithKline Consumer Healthcare is engaged in the manufacture of health food, malted foods, health drinks, milk fluid and powders, biscuits, health care products and pharmaceutical products and powders. Co.'s flagship product, Horlicks, is scientifically developed and specifically caters to the nutritional needs of the Indian diet. It helps meet the requirements of essential nutrients in children, such as iron and vitamins that aid iron absorption. Horlicks is sold in a number of countries across the world. In addition, Co. also manufactures and markets brands such as Boost, Viva, Maltova, Biscuits, Foodles, Eno, Crocin, Iodex and Sensodyne.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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