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Motilal Oswal Report
GlaxoSmithKline Pharmaceuticals Ltd.'s performance for the quarter was deeply impacted by the Covid-19-led disruption. As a result, the company posted the lowest revenue recorded in the past 16 quarters.
The severity amplified with reduced operating leverage. The outlook is expected to gradually improve with the easing of the lockdown.
Revenues were down 17.7% to Rs 6.5 billion (versus our estimate of Rs 7.8 billion). Gross margin expanded 230 basis points YoY to 60.3%, led by a better product mix.
However, the Ebitda margin contracted 340 basis points YoY to 17.6% on higher employee costs and other expenditure (up 530 basis points and 40 basis points respectively YoY as a percentage of sales), offsetting the benefit of better gross margin.
Ebitda declined by 31% YoY to Rs 1.1 billion (versus out estimate of Rs 1.7 billion). Adjusting for interest on income tax refund in other income, profit after tax was down 33% YoY to Rs 787 million (our estimate Rs 1.3 billion).
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