Research Report on GSK Consumer - Target of INR3642 Achieved - hold the Stock
Rajesh Desai
Dear Sir/ Madam,
We had Initiated GlaxoSmithKline Consumer Healthcare Ltd (GSKCH) a BUY at INR2977 in our report dated 10 Oct 2012 with a Target price of INR3642, which was the highest Target price in Bloomberg Analyst rating that time. The stock has today surpassed our Target price of INR3642 giving a return of 22.3% in just 1months time .We advise the Investors to hold the stock at the current level as its parent company has come out with an open offer at INR3900 per share for the acquisition of 31.8% of the share capital from the public. It’s parent company currently holds 43.1% stake in the company and is looking to raise its stake up to 75%.
Open Offer details
1.1. Size: 13,389,410 Shares representing 31.84% of the Voting Share Capital of the Target Company.
1.2. Price / consideration: INR 3,900 (Rupees three thousand and nine hundred) per Share (the “Open Offer Price”)
1.3. Mode of payment (cash/security): The Open Offer Price will be payable in cash by the Acquirer, in accordance with the provisions of
Regulation 9(1)(a) of the SEBI (SAST) Regulations, 2011.
From: microsec_research
Sent: Thursday, October 11, 2012 10:01 AM
Subject: Research Report on GSK Consumer Healthcare LTd.
Dear Sir/ Madam
We rate GSK Consumer Healthcare Ltd a BUY. GlaxoSmithKline Consumer Healthcare Ltd (GSKCH) is an Indian associate of GlaxoSmithKline plc, UK. It is one of the largest players in the Health Food Drinks Industry in India. Its flagship product, Horlicks, is a highly respected brand which is over 100 yrs old in India. It also manufactures Boost, Viva and Maltova and distributes brands like Eno, Crocin and Iodex.
At the CMP of INR2977 the stock discounts its CY12E EPS of INR102.3 by 29.1x and its CY13E EPS of INR125.6 by 23.7x. With Established Brand like Horlicks, Boost, Maltova and Viva, Strong ROE, Stable EBITDA Margin and Focus on Health & Nutrients, the prospect of the company appears to be good for long term. We assign a P/E multiple of 29x to its CY13E EPS of INR125.6 to arrive at the target price of INR3642 for the stock.
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
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CA. Rajesh Desai