IIFL retains 'Buy' rating on GSK Consumer
IIFL retains `Buy’ rating on GSK Consumer with a target price of Rs. 1627. GSK Consumer is transforming itself from a single product company to a more aggressive and innovative processed foods player.
By ET Bureau |
RESEARCH: IIFL
RATING:BUY
CMP:RS 1376
IIFL retains `Buy’ rating on GSK Consumer with a target price of Rs. 1627. GSK Consumer is transforming itself from a single product company to a more aggressive and innovative processed foods player. With its flagship brand, Horlicks, ranked the No 1 food brand in India by the AC Nielsen Brand Equity survey, GSK is, for the first time, pursuing new food categories on the health and wellness platform, which would add new growth drivers.
IIFL now values the company at 22x core EPS and add cash per share to arrive at a 12-month target price of Rs 1,627. GSK is aggressively extending the brand into new categories-biscuits , nutritional bars, noodles and health supplements-on the health and wellness platform.
Over the next two years, GSK aims to double sales from these extensions. Core malted food drinks (MFD) growth has accelerated and affordably priced product is to expand the category further: The MFD category’s volume growth has picked up from 4-5 % pa during CY00-05 to over 10% in CY05-08 , as penetration has seen steeper increases due to consistent advertising based on scientific claims.
RATING:BUY
CMP:RS 1376
IIFL retains `Buy’ rating on GSK Consumer with a target price of Rs. 1627. GSK Consumer is transforming itself from a single product company to a more aggressive and innovative processed foods player. With its flagship brand, Horlicks, ranked the No 1 food brand in India by the AC Nielsen Brand Equity survey, GSK is, for the first time, pursuing new food categories on the health and wellness platform, which would add new growth drivers.
IIFL now values the company at 22x core EPS and add cash per share to arrive at a 12-month target price of Rs 1,627. GSK is aggressively extending the brand into new categories-biscuits , nutritional bars, noodles and health supplements-on the health and wellness platform.
Over the next two years, GSK aims to double sales from these extensions. Core malted food drinks (MFD) growth has accelerated and affordably priced product is to expand the category further: The MFD category’s volume growth has picked up from 4-5 % pa during CY00-05 to over 10% in CY05-08 , as penetration has seen steeper increases due to consistent advertising based on scientific claims.
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