GSK Pharma Q2 Review— Temporary Hiccups Lead To Muted Show On A YoY Basis; Motilal Oswal Maintains Neutral

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Motilal Oswal Report

GlaxoSmithKline Pharmaceuticals Ltd. reported lower-than-expected revenue for the quarter. However, Ebitda/PAT were slightly higher than expectations, as controlled costs resulted in improved profitability.

After a healthy pick-up in YoY revenue growth in FY24/FY25, GSK Pharma achieved a revenue decline on a YoY basis in Q2 FY26/H1 FY26. Certain one-time events like the GST transition and the fire incident at GSK Pharma’s contract manufacturing organisation partner impacted the company’s performance during the quarter and H1 FY26.

GSK Pharma continues to maintain a strong lead in the vaccine market with offerings for both pediatrics and adults. The company has reached ~400,000 healthcare professionals to market its vaccine portfolio. Specifically, for Shingrix, it reached 38k HCPs in Q2 FY26.

In addition to vaccines, GSK Pharma is building a specialty portfolio in the respiratory and oncology segments. Products launched in the oncology segment have also been well-received by HCPs.

We largely maintain our estimates for FY26/FY27/FY28. We value GSK Pharma at 38 times 12 months forward earnings to arrive at a target price of Rs 2,800.

After resolving temporary issues and marketing efforts towards the specialty portfolio, we expect GSK Pharma to deliver a 13% earnings CAGR over FY25-28.

The current valuation factors in the earnings upside and, hence, we maintain a Neutral rating on the stock.

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