Buy GSK Consumer with a target at Rs 6960: JM Financial
Sales and EBITDA fell 9.6 per cent and 11.2 per cent - the first-ever decline in recent history. The company, though, pegs underlying growth to be 1.5 per cent and 2.2 per cent
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| Updated: JM Financial Research maintains buy on GSK Consumer post March quarter results with a 12-month target price of Rs 6960 even though March quarter earnings were significantly weaker than expectations.
Sales and EBITDA fell 9.6 per cent and 11.2 per cent - the first-ever decline in recent history. The company, though, pegs underlying growth to be 1.5 per cent and 2.2 per cent.
GPM expansion was also much lower compared to earlier quarters at 103bps despite 6 per cent price-hike undertaken in Jan'16. "We suspect that mix likely deteriorated. Horlicks continued to gain share, implying that the weakness was largely market-led, and perhaps some underperformance in Boost," said the report.
Sales and EBITDA fell 9.6 per cent and 11.2 per cent - the first-ever decline in recent history. The company, though, pegs underlying growth to be 1.5 per cent and 2.2 per cent.
GPM expansion was also much lower compared to earlier quarters at 103bps despite 6 per cent price-hike undertaken in Jan'16. "We suspect that mix likely deteriorated. Horlicks continued to gain share, implying that the weakness was largely market-led, and perhaps some underperformance in Boost," said the report.
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