The stock of GlaxoSmithKline Pharmaceuticals (GSK Pharma) is down 14 per cent since February, underperforming the BSE Healthcare index, which is up about 5.7 per cent during this period. From its highs in early February, the Indian unit of the pharma multinational has lost a fifth of its market capitalisation (mcap). While a weak December quarter performance and downgrades have led to muted returns, most brokerages have a neutral stance, given the valuation concerns.
Even as top pharmaceutical peers delivered double-digit growth in the December quarter, sales of GSK Pharma, at 805 crore, were flat over the year-ago quarter. They were also less than the ₹860 crore estimated by brokerages.
The flattish revenue was on account of price cuts in key brands and a slowdown in the acute segment. Prices of antibiotic Ceftum and ointment T-Bact were cut by 57 per cent and 30 per cent, respectively, though some of this was offset by volume growth on a sequential basis.
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