Glaxo Smithkline Result Review

GlaxoSmithKline Pharma’s (GSK Pharma) Q1CY08 results were broadly in line with our expectations. Net sales have decreased by 0.7% YoY to Rs 4.2bn. However, excluding the contribution of the fine chemicals business which was divested in September 2007, net sales have increased by 5.3%, in line with estimates. Priority products witnessed a healthy growth of 9% YoY, while the sales of price-controlled products were affected by pipeline inventory adjustments owing to excise-related price changes. The EBITDA margin has expanded marginally by 30bps YoY to 36.4% while higher non-operational income resulted in 8.9% growth in PAT to Rs 1.2bn