Karvy Stock Broking has upgraded its rating on GlaxoSmithkline Pharma to outperformer with a target price of Rs 1280 in its April 9, 2009 research report.
“We believe net revenues for the quarter will move up by 11.4% to Rs 4660 million. Part of the growth can be attributed to lower excise duty for this quarter. The revenue growth will mainly be driven by priority products which will be growing by double digits. Operating margins are expected to be flat at 36.2%, while profits for the quarter are expected to be higher by 8% to Rs 1322 million.”
“We marginally upgraded our CY 09E EPS by 0.6 % to Rs 61.9 and introduce our CY 10E estimates at Rs 69.4. At the current price of Rs 1085 excluding cash of Rs 207, the stock is quoting at 14.2x CY 09E. We value the base business at 15x CY 10E and add Rs 240 cash per share. We value GSK Pharma at Rs 1280 and upgrade the stock to Outperformer,” says Karvy Stock Broking’s research report.
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