Motilal Oswal: GSK Pharma’s Better Operating Leverage Drives Q2 Profitability
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Motilal Oswal Report
GlaxoSmithKline Pharmaceuticals Ltd.’s Q2 FY21 performance was better than estimates.
Compared to sharp YoY decline in Q1 FY21 sales, the company’s sales were steady in Q2 FY21, which implies recovery in its base business.
The company’s revenues in Q2 FY21 were flat YoY at Rs 8.8 billion (versus estimate Rs 7.8 billion).
Gross Margin was steady YoY at 58.2%. However, Ebitda margin expanded 130 basis points YoY to 23.3% due to lower other expenditure (down 190 basis points YoY as percentage of sales), which was offset to some extent by higher employee cost.
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