GlaxoSmithKline Consumer Healthcare (GSKCH) is an associate of GlaxoSmithKline plc UK, which holds 72.46% stake in the company. It is India’s dominant player in health food drink (HFD) category with 67.3% market share. While Horlicks leads the market, Boost is among the top three health food drink brands.
Valuation and view
GSKCH is better placed than peers given its strong pricing power, leadership position and distribution reach in the core HFD portfolio. We expect revenue and PAT to grow at a CAGR of 9.8% and 15.8% over FY15-FY18E. Further, we rate the stock as ‘BUY’ assigning a forward P/E of 31.5x arriving at a target price of Rs. 6,788 which implies potential upside of ~12% for next 12 months.
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