Glaxo Smithkline Pharma
Simultaneously, the company has planned new initiatives to grow its matured portfolio - focus on hospitals and rural penetration, re-organization of field force and contract field force for non-promoted drugs.
In addition, the company is planning to launch other "non-exclusive" products (such as Welbutrin XR, Seretide) from parentâ€™s portfolio. It has Rs14.7 billion in cash (Dec '07, 16% of market cap), which gives it significant leeway to fortify portfolio by brand acquisition.
Stock is trading at 18.5x C08 and 16x C09 EPSe. GSK's current valuations are at the lower end of its last 2-3 yearsâ€™ trading history (see inside) in terms of forward P/E multiple (22-33x), PEG (1.5-3), and sector premium (at par with 40% premium). Morgan has set a price target of Rs 1,280.
If you are holding to the stock, you can continue to HOLD and one can accumulate at lower levels only.