GlaxoSmithkline Consumer Healthcare Ltd's Q3FY19 standalone net profit rises 35.1% yoy to Rs221.1cr : Beats Estimates

The company’s standalone revenue stood at Rs1,116.8cr, up 7.5% yoy but down 12.2% qoq.

Feb 14, 2019 05:02 IST India Infoline Research Team

GlaxoSmithkline Consumer Healthcare Ltd Q3FY19

Standalone Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Revenue 1,116.8 7.5
EBITDA 238.5 14.9
EBITDA Margin (%) 21.4 139
Net Profit  221.1 35.1
***EBITDA margin change is bps
GSK Consumer reported healthy set of numbers for the quarter; revenue and EBITDA were broadly in-line with estimates, however, PAT was a above estimate led by higher other income. Revenue for the quarter grew by 7.5% yoy to Rs1,116.8cr, broadly in-line with the estimates. Gross margin of the company expanded by 172bps yoy to 70.7%. EBITDA for the company grew by 14.9% yoy to Rs238.5cr. Improvement in gross margin and lower other expenses (as percent of sales) led to EBITDA margin expansion of 139bps yoy to 21.4%. Aided by significant increase in other income (up 104.8% yoy), PAT reported strong growth of 35.1% yoy to Rs221.1cr, ~8% higher than the estimates.
  • Company reported volume growth of 8.7% yoy (9.6% yoy volume growth in HFD category). This growth is broad based and across channels; Horlicks grew in double digits.
  • Company indicated that the rural segment continues to grow at a faster rate than the urban segment.
  • Sachets witnessed double digit volume growth during the quarter, contributing 10% to the sales (8% in Q3FY18). This was led by distribution and strong on-air support.
  • Region-wise sales breakup – North 7%, South 41%, East 40%, West 4% and exports 9%.
  • Benefitting from lower input costs (especially milk), gross margin for the quarter expanded by 172bps yoy.
  • Advertisement cost was up 114bps yoy to 12.1%; company continued investment behind brands. Company expects 13% of sales to fund innovation & drive Horlicks campaign.
  • Other expenses were down 217bps yoy. However, the savings in raw material costs and overheads were partially offset by higher employee and advertisement costs.
  • Other income was up by 104.8% to Rs124.3cr. This was aided by ~19% yoy increase in auxillary income (led by OTC products & strong oral care portfolio performance), higher interest income of Rs20cr and tax credit of Rs40cr (one-off item).
  • Volume market share for Horlicks (including extensions) stood at 49.5% (43% in value terms; down 30bps qoq) and for Boost stood at 13.9% (value share of 10.8%; down 10bps qoq).
  • Horlicks Protein+ market share increased to 5%; product available in 85,000 outlets.
  • The company has taken price hike of 2.5-3% in product portfolio in January, 2019.

Technical View:

GlaxoSmithkline Consumer Healthcare Ltd is currently trading at Rs. 7,281.60, down by 146.55 points or 1.97% from its previous closing of Rs. 7,428.15 on the BSE.
The scrip opened at Rs. 7,320 and has touched a high and low of Rs. 7,320 and Rs. 7,276.80 respectively. So far 3,361 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 50 DMA.

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