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Elder Pharma & GlaxoSmithKline Consumer

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SI Team Mumbai

ELDER PHARMA
Current price: Rs 381
Current intrinsic value: Rs 449
Elder Pharmaceuticals (EPL) posted a consolidated revenue of Rs 300 crore in Q1FY12, up by 54.2 per cent compared to the last year. Of this, the revenue of Rs 76 crore was from the recently acquired stakes in Elder Biomeda AD and Neutrahealth PLC. EPL's margins witnessed some pressure in Q1FY12. It was on account of higher raw material and employee costs. On the business front, the company launched three new products in the pain management and the nutraceuticals segment in Q1FY12. New product launches would be critical for sustaining the top line growth.

 

—CARE Research

GLAXOSMITHKLINE CONSUMER
Reco Price: Rs 2,346
Target Price: Rs 2,900
The consumption pattern in the MFD category, 94 per cent of the total sales, is expected to witness a significant change, and, thus, create growth tailwinds as well as mix-improvement-led margin expansion opportunity. Value-added offerings are showing double-digit volume growth but the competition has increased in the past one year. However, the growth story of the MFD category is intact as it is still nascent with low penetration levels and the industry is shifting from discretionary to necessity spending. Increase in the number of players and product lines will help grow the category and GSK, being the market leader, will likely benefit disproportionately. The impact of price increases on volume growth and high payout ratio is something to be wary of. Retain add.

—Kotak Institutional Equities

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First Published: Sep 15 2011 | 12:39 AM IST

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