Nifty Tips
GlaxoSmithKline Pharmaceuticals’ Q2CY10 numbers are lower than our expectations. Revenue growth was largely impacted because of supply constraints in the vaccine segment. Despite strong operating performance, lower other income has impacted the profitability of the company. We are of the view that supply constraint is a temporary phenomenon and business should recover going forward. We retain our earning estimates of Rs 70.3 and Rs 80.8 for CY10E and CY11E respectively. However, owing to rich valuations, we downgrade our rating one notch from Accumulate to Hold with a Price target of Rs 2020 (25x CY11E; 5year average one year forward multiple). At CMP of Rs 2054, the stock is trading at 29.2x CY10E and 25.4xCY11E,
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