28 July 2016
1QFY17 Results Update | Sector:
Healthcare
BSE SENSEX
28,209
S&P CNX
8,666
CMP: INR3,348
TP: INR3,150 (-6%)
GSK Pharma
Neutral
Weak results; margin improvement is key
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val (INR m)
Free float (%)
Financials & Valuation (INR b)
Y/E MAR
GLXO IN
84.7
283.6/4.2
3,850/3,036
-10/-10/-4
33
25.0
2016 2017E 2018E
27.4
4.5
3.7
44.2
-29.2
200.2
22.1
21.2
75.8
16.7
30.4
4.9
4.4
52.2
18.3
172.0
30.4
28.0
64.1
19.5
34.1
7.2
5.9
70.0
34.0
161.5
43.4
41.9
47.8
20.7
Sales
EBITDA
Net Profit
Adj. EPS
(INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
P/E (x)
P/BV (x)
Estimate change
TP change
Rating change
GSK Pharma’s (GLXO) 1QFY17 sales increased 10% YoY to INR6.9b (3% below
estimate), while EBITDA declined 32% YoY to INR702m (26% below estimate)
and PAT fell 23% YoY to INR723m (29% miss). Reported PAT included
exceptional income of INR18m related to the sale of land at Mulund. Capacity
constrains at Nasik facility, unavailability of quality third suppliers and policy
actions have been the key issues for GSK over the past few quarters.
Deal with Novartis boosts sales growth:
Total sales growth of ~10% YoY
includes ~4% growth from the vaccines asset sale agreement with Novartis
India. During the quarter, sales would have negatively impacted by various
regulatory actions. We expect revenues to grow at ~11-12% CAGR over FY16-
18E, in line with industry, led by: (1) commissioning of Bangalore capacity in
FY17 (resolving capacity issues), (2) high volume growth in key brands post
new pricing policy, (3) launches from its parent’s pipeline, and (4) price hikes
undertaken in DPCO products.
Margins contract significantly; improvement is key for growth:
EBITDA
margins at 10.2% (-650bp YoY) declined primarily due to an increase in other
operating expenses (+~600bp YoY). Regulatory issues also had a negative
impact on margins in 1Q. According to AIOCD, the impact of new DPCO list,
FDC ban and WPI deflation would be ~3% on GLXO. We believe that over time
due to substitution of products and increase in volumes, the real impact could
be much lower than this.
Valuation and view:
We believe GLXO has strong parent support, superior
brand portfolio (competitive advantage), high payout ratio (~100%) and
industry-leading return ratios (RoCE of 50%+). However, current valuation at
64x FY17E and 48x FY18E is on the higher side of historical P/E. Maintain
Neutral
with a target price of INR3,150 @ 45x FY18E PER. We cut our
FY17/18E EPS by ~10% on the back of slower revenue growth and margin
improvement.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.
Kumar Saurabh
(Kumar.Saurabh@MotilalOswal.com); +91 22 6129 1519

GSK Pharma
1QFY17 Result Snapshot
Exhibit 1: Quarterly Profit and Loss Statement
(INR m)
Total revenues
Cost of revenues
Gross profit
Gross margin (%)
Staff cost
% of Total Revenues
Other expense
% of Total Revenues
EBITDA
EBITDA margin (%)
Depreciation
% of Total Revenues
EBIT
Interest cost
Other income (net)
PBT
Income tax
Effective tax rate (%)
Adjusted Net Profit
Exceptional items
1QFY16
6,219
2,801
3,418
55.0
1,083
17.4
1,300
20.9
1,036
16.7
49
0.8
986
-
463
1,450
493
34.0
957
-24
4QFY16
6,861
3,090
3,771
55.0
1,089
15.9
1,462
21.3
1,220
17.8
67
1.0
1,153
-
310
1,463
565
38.6
898
161
1QFY17
6,852
3,143
3,709
54.1
1,180
17.2
1,826
26.7
702
10.2
54
0.8
649
-
441
1,090
386
35.4
705
18
(4.7)
(24.8)
(21.8)
136 bp
(26.4)
(128.4)
42.2
(25.5)
(31.7)
(323)bp
(21.6)
%YoY
10.2
12.2
8.5
(83)bp
9.0
(18)bp
40.5
575 bp
(32.2)
(640)bp
9.1
(13.5)
(34.2)
%QoQ
(0.1)
1.7
(1.6)
(83)bp
8.4
135 bp
24.9
535 bp
(42.4)
(753)bp
(20.1)
31.8
(43.7)
FY16
27,411
12,380
15,031
54.8
4,434
16.2
6,081
22.2
4,516
16.5
248
0.9
4,269
-
1,500
5,769
2,026
35.1
3,742
-
3,742
FY17E
30,380
13,671
16,709
55.0
4,988
16.4
6,775
22.3
4,947
16.3
246
0.8
4,700
-
1,808
6,508
2,082
32.0
4,425
-135
4,290
20.5
12.8
2.8
(313)bp
18.3
(100.0)
14.6
%YoY
10.8
10.4
11.2
16 bp
12.5
24 bp
11.4
11 bp
9.5
(19)bp
(0.6)
(106.7)
10.1
933
1,060
723
(22.5)
(31.8)
Reported Net Profit
*FY15 – Due to change in financial year end from DEC to MAR, FY15 includes five quarters
Source: Company, MOSL
28 July 2016
2

GSK Pharma
Secondary sales (AIOCD)
Exhibit 2: Top 10 Drugs
GSK Pharma declined 9%
in Apr 16
Drug
Total
Therapy
Anti-Infectives
Vaccines
Pain / Analgesics
Derma
Gastro Intestinal
Derma
Hormones
Vaccines
Anti-Infectives
Hormones
Apart from Vaccines all
other therapies have
showed disappointed
growth
Augmentin
Synflorix
Calpol
Betnovate C
Zinetac
Betnovate N
Eltroxin
Rotarix
Ceftum
Betnesol
Growth (%)
MAT Apr 16
Value(INRm) Gr. (%) Mkt Sh.
3M Apr-16
31,584
3.0
100.0
-3.9
-8.6
3,141
-3.4
9.9
-14.0 -12.9
1,972
25.3
6.2
20.7
13.1
1,755
11.0
5.6
5.2
6.9
1,592
31.9
5.0
3.0
-25.9
1,550
2.4
4.9
0.4
-2.4
1,542
27.5
4.9
20.8
0.0
1,328
12.6
4.2
4.3
-7.3
1,294
63.7
4.1
40.4
55.8
1,270
1.9
4.0
-1.7
-1.3
1,172
30.9
3.7
-12.3 -22.2
Source: AIOCD, MOSL
Exhibit 3: Therapy Mix (%)
Share
100.0
23.9
19.9
14.3
9.3
8.2
7.4
MAT Gr. (%)
3.0
-3.9
2.6
22.9
9.2
20.8
5.0
Chronic portfolio is growing
at 9.6% YoY on MAT basis
Anti-Infectives
Derma
Vaccines
Pain / Analgesics
Hormones
Vitamins / Minerals / Nutrients
3M
-3.9
-5.2
-16.3
31.8
3.2
-3.8
-3.9
Apr 16 Growth
-8.6
-6.7
-29.4
35.6
-1.9
-14.7
-2.1
Source: AIOCD, MOSL
Exhibit 4: Brand wise growth distribution
% of sales
Total
Top 10 Brands
11 to 25 Brands
26 to 50 Brands
Above 50 Brands
100.0
52.6
19.5
14.2
13.7
MAT growth (%)
3.0
15.0
3.3
-0.8
-24.6
Growth Contribution (%)
100.0
235.4
21.4
-3.8
-152.9
Source: AIOCD, MOSL
Exhibit 5: Acute v/s Chronic (MAT growth)
MAT VAL MAR 16 (INR b)
26.7
MAT VAL GR MAR 16 (%)
Exhibit 6: Growth Distribution (%) (MAT Apr 16)
9.6
5.5
2.0
3.9
0.8
1.9
Price GR
NP GR
Source: AIOCD, MOSL
ACUTE
CHRONIC
Source: AIOCD, MOSL
Vol GR
28 July 2016
3

GSK Pharma
Operating metrics
Exhibit 7: Key operating metrics
3QCY13 4QCY13 1QFY15
Revenue Gr. (%)
As % of sales
Raw material
Staff cost
Other expenses
Tax Rate
Margins (%)
Gross Margins
EBITDA Margins
EBIT Margins
PAT margins
55.7
17.4
23.9
16.3
50.2
17.7
25.4
18.5
50.9
16.3
24.7
16.1
51.5
16.7
22.8
15.0
53.5
21.3
26.4
17.4
55.6
17.0
22.7
7.0
55.0
19.4
26.3
16.8
55.0
16.7
23.3
15.0
56.4
17.4
22.4
13.9
53.1
14.1
17.6
11.0
55.0
17.8
21.3
15.4
54.1
10.2
15.9
10.5
44.3
15.3
23.0
31.5
49.8
14.1
18.5
32.3
49.1
13.9
20.7
34.9
48.5
15.7
19.2
34.1
46.5
13.5
18.8
34.1
44.4
16.4
22.2
37.7
45.0
16.5
20.0
32.0
45.0
17.4
0.2
34.0
43.6
16.3
0.2
32.9
46.9
15.6
0.2
35.1
45.0
15.9
0.2
38.6
45.9
17.2
0.3
35.4
-7.2
-4.0
-5.1
2QFY15
2.8
3QFY15
19.1
4QFY15 5QFY15
2.5
2.3
1QFY16 2QFY16
-5.1
-6.4
3QFY16 4QFY16 1QFY17
12.8
11.8
10.2
Source: Company; MOSL
28 July 2016
4

GSK Pharma
Valuation and view
Post strong stock performance in the last nine months, we expect valuation upside
for GLXO to be limited from current levels. The stock currently trades at 64x FY17E
and 48x FY18E, at huge premium to the sector and at par with its three year average
P/E multiples.
However, we believe that premium multiples for GLXO are justifiable owing to:
Strong MNC parentage providing access to innovative products
Formidable brands in the domestic market, providing competitive
advantage
High payout ratio (90%+)
Industry leading return ratios, with ROCE of 50%+
Earnings rebound over next two years as we expect 11% EPS CAGR (FY15-
18E) compared to -30% EPS growth in CY13.
Maintain Neutral:
We value GLXO at 45x FY18E earnings to arrive at a revised
target price of INR3,150 and maintain our
Neutral
rating. Our target multiple is at a
discount to its current 1 year forward P/E multiple (51x) but at par with its 3 year
average trading multiple due to potential earnings recovery. Key risks to our
assumptions is a faster than expected recovery in margins.
Exhibit 8: GSK trades at 51x P/E (1 yr fwd)
82
68
54
40
26
12
34.3
29.6
15.3
47.3
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
74.3
Exhibit 9: Premium valuation relative to Sensex to P/E
300
200
100
0
-100
103.6
GSK Pharma PE Relative to Sensex PE (%)
LPA (%)
179.0
Source:
Bloomberg/MOSL
Source: Bloomberg/MOSL
28 July 2016
5

GSK Pharma
Story in charts
Exhibit 10: Sales growth boosted due to Novartis deal
Net Sales
YoY Change (%)
11.8
12.8
7,287
-6.4
1Q
2Q
FY16
3Q
4Q
1Q
FY17E
Source: Company, MOSL
6,861
6,852
1,036
1Q
1,207
2Q
FY16
1,027
3Q
1,220
4Q
702
1Q
FY17E
Source: Company, MOSL
10.2
16.7
Exhibit
11:
EBITDA margin contracted significantly in 1Q
EBITDA
17.4
14.1
10.2
Margins (%)
17.8
6,219
-5.1
6,919
Exhibit
12:
Price hikes and volume uptick to aid recovery in
sales growth
Exhibit
13:
Profitability to improve gradually
Total sales (INR m)
29.9
12.9
12.2
7,378
32,725
25,202
CY12
CY13
FY15
FY16
30,380
FY17E FY18E
CY10
CY11
CY12
CY13
FY15
FY16
FY17E FY18E
34,097
7,445
7,888
4,961
YoY Growth (%)
34.9
-16.2 10.8
27,411
-3.1
21,116
23,380
CY10
CY11
25,999
31.8
EBITDA (INR m)
30.3
19.7
18.4
6,009
16.5
4,516
16.3
4,947
21.1
7,185
EBITDA Margin (%)
10.7
11.2
Source: Company, MOSL
Source: Company, MOSL
Exhibit
14:
Free-cash flow available for potential inorganic
opportunities
Exhibit
15:
Consistent dividend payout policy
Cash & cash equivalents (INR b)
21
21
21
21
19
13
8
7
66
40
69
45
64
45
50
102
114
63
168
70
DPS (INR)
Dividend Payout (%)
153
114
70
65
CY10
CY11
CY12
CY13
FY15
FY16
FY17E FY18E
CY10
CY11
CY12
CY13
FY15
FY16
FY17E
FY18E
Source: Company, MOSL
Source: Company, MOSL
28 July 2016
6

GSK Pharma
Financials and valuations
Income Statement
Y/E December
Net Sales
Change (%)
Total Expenditure
EBITDA
Change (%)
Margin (%)
Depreciation
EBIT
Int. and Fin. Charges
Other Income - Rec.
PBT & EO Expense
Tax
Tax Rate (%)
Adj PAT
EO Expense (net of tax)
Reported PAT
Change (%)
Margin (%)
2011
23,380
10.7
15,935
7,445
0.9
31.8
204
7,241
3
1,978
9,216
2,902
31.5
6,314
-2,008
4,306
8.6
18.4
2012
25,999
11.2
18,112
7,888
5.9
30.3
178
7,709
3
2,242
9,948
3,176
31.9
6,772
-999
5,773
7.3
22.2
2013
25,202
-3.1
20,241
4,961
-37.1
19.7
199
4,762
3
2,272
7,031
2,274
32.3
4,756
262
5,018
-29.8
19.9
2015
32,725
29.9
26,715
6,009
21.1
18.4
254
5,756
0
2,320
8,076
2,793
34.6
5,283
519
5,802
11.1
17.7
2016
27,411
-16.2
22,895
4,516
-24.8
16.5
248
4,269
0
1,500
5,769
2,026
35.1
3,742
-135
3,607
-29.2
13.2
2017E
30,380
10.8
25,434
4,947
9.5
16.3
246
4,700
0
1,808
6,508
2,082
32.0
4,425
0
4,425
18.3
14.6
(INR Million)
2018E
34,097
12.2
26,912
7,185
45.3
21.1
314
6,871
0
2,033
8,904
2,974
33.4
5,930
0
5,930
34.0
17.4
Balance Sheet
Y/E December
Equity Share Capital
Reserves
Capital Reserve
Net Worth
Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Account Receivables
Cash & Bank Balance
Others
Curr. Liability & Prov.
Account Payables
Other Liabilities
Provisions
Net Current Assets
Deferred Tax Assets
Appl. of Funds
E: MOSL Estimates: Y/E March from FY15
2011
847
18,336
17
19,199
49
19,248
2,717
1,725
991
254
1,598
26,653
3,301
853
19,841
2,657
10,862
2,714
8,148
15,790
615
19,248
2012
847
19,237
17
20,100
46
20,146
2,720
1,826
894
534
1,026
27,577
2,820
1,159
20,388
3,210
10,751
3,278
7,472
16,826
865
20,146
2013
847
19,308
17
20,172
36
20,208
2,991
1,990
1,001
770
577
28,230
3,424
964
20,271
3,571
11,291
3,692
7,599
16,940
921
20,208
2015
847
17,426
17
18,290
26
18,316
3,212
1,981
1,231
1,152
1
28,942
3,756
1,003
19,106
5,077
13,841
4,434
9,406
15,101
831
18,316
2016
847
16,097
17
16,961
16
16,977
2,244
2,229
15
4,702
1
24,854
5,259
1,266
13,476
4,854
13,483
5,362
8,121
11,371
888
16,977
2017E
847
13,704
17
14,567
16
14,583
2,944
2,475
469
6,502
1
20,395
5,165
1,519
7,939
5,772
13,671
4,557
9,114
6,724
888
14,583
(INR Million)
2018E
847
12,815
17
13,679
16
13,695
4,444
2,789
1,655
5,502
1
20,993
5,797
1,705
7,013
6,478
15,344
5,115
10,229
5,650
888
13,695
28 July 2016
7

GSK Pharma
Financials and valuations
Ratios
Y/E December
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Debtor (Days)
Inventory (Days)
Working Capital (Days)
Leverage Ratio
Debt/Equity
2011
74.5
77.0
226.7
45.0
68.8
44.9
43.5
14.8
11.2
35.2
1.3
32.9
32.7
-233.1
22.5
13
52
-63
0.0
33.7
34.4
-247.2
27.6
16
40
-50
0.0
23.6
23.6
-200.6
26.6
14
50
-48
0.0
2012
79.9
82.1
237.3
45.0
64.2
2013
56.2
58.5
238.1
50.0
101.5
2015
62.4
65.4
215.9
62.5
114.3
67.1
64.0
15.5
10.1
55.0
1.9
23.1
21.9
-179.7
23.5
14
52
-56
0.0
2016
44.2
47.1
200.2
65.0
167.8
75.8
71.1
16.7
9.9
59.8
1.9
22.1
21.2
-176.1
44.0
17
70
-28
0.0
2017E
52.2
55.2
172.0
70.0
152.8
64.1
60.7
19.5
9.1
55.7
2.1
30.4
28.0
-602.6
125.6
18
62
-15
0.0
2018E
70.0
73.7
161.5
70.0
114.0
47.8
45.4
20.7
8.1
38.5
2.1
43.4
41.9
693.4
32.1
18
62
-15
0.0
Cash Flow Statement
Y/E December
Oper. Profit/(Loss) bef. Tax
Interest/Div. Recd.
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
EO expense
CF frm Op. incl EO exp.
(inc)/dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from investments
Change in Net Worth
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates; Y/E March from FY15
2011
5,438
1,978
-2,953
103
4,565
-2,008
6,573
-272
4,293
5
-267
-2,076
-3
-3
-3,863
-5,945
360
19,481
19,841
2012
6,888
2,242
-3,427
-489
5,214
-999
6,214
-361
4,853
572
211
-1,525
-3
-3
-4,346
-5,877
547
19,841
20,388
2013
5,223
2,272
-2,330
-712
4,452
262
4,190
-541
3,911
449
-92
145
-10
-3
-4,346
-4,215
-116
20,388
20,271
2015
6,528
2,320
-2,703
410
6,555
519
6,036
-603
5,952
576
-27
-1,129
-10
0
-6,036
-7,175
-1,166
20,271
19,106
2016
4,381
1,500
-2,083
-1,900
1,898
-135
2,033
-2,582
-684
0
-2,582
1,207
-10
0
-6,278
-5,081
-5,630
19,106
13,476
(INR Million)
2017E
4,947
1,808
-2,082
-890
3,782
0
3,782
-2,500
1,282
0
-2,500
-58
0
0
-6,761
-6,819
-5,537
13,476
7,939
2018E
7,185
2,033
-2,974
149
6,393
0
6,393
-500
5,893
0
-500
-58
0
0
-6,761
-6,819
-926
7,939
7,013
28 July 2016
8

GSK Pharma
Corporate profile: GSK Pharma
Company description
GSK Pharma (75% subsidiary of GSK Plc) is the 5th
largest formulations company and second largest
pharma MNC in India, with a strong presence in
segments like dermatology, respiratory and
vaccines. Its parent has one of the richest product
and R&D pipelines among Pharma companies
worldwide.
Exhibit
16:
Sensex rebased
Exhibit
17:
Shareholding pattern (%)
Jun-16
Promoter
DII
FII
Others
75.0
9.7
2.3
13.0
Mar-16
75.0
9.7
2.3
13.0
Jun-15
75.0
9.4
2.1
13.5
Exhibit
18:
Top holders
Holder Name
Lic Of India Wealth Plus Fund
Birla Sun Life Trustee Company Private Limited
General Insurance Corporation Of India
% Holding
6.0
1.2
1.1
Note: FII Includes depository receipts
Exhibit 19: Top management
Name
Deepak Parekh
Annaswamy Vaidheesh
A Aristidou
R C Sequeira
Raju Krishnaswamy
A A Nadkarni
Designation
Chairman
Managing Director
Executive Director & CFO
Executive Director (HR)
Executive Director (Technical)
Company Secretary
Exhibit
20:
Directors
Name
Deepak Parekh
Annaswamy Vaidheesh
A Aristidou
R C Sequeira
Raju Krishnaswamy
A N Roy*
Name
Anjali P Bansal*
D Sundaram*
Nihal Kaviratne*
P V Bhide*
R R Bajaaj*
Regis Simard
*Independent
Exhibit
21:
Auditors
Name
Price Waterhouse & Co LLP
R Nanabhoy & Co
Type
Statutory
Cost Auditor
Exhibit
22
MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
52.2
70.0
Consensus
forecast
59.5
65.9
Variation
(%)
-12.3
6.2
28 July 2016
9

Disclosures
This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company (ies) and/sector(s), if any, covered in the report and may be distributed by it and/or its affiliated
company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to invest in securities
or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your general information and should not
be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any
advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income
from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a some companies covered by our
Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other
business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may educate investors on investments in such business . The research professionals
responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our research professionals are paid on twin parameters of
performance & profitability of MOSt.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits
its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market
commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the
recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing among other things, may give rise to real or potential conflicts of interest. MOSt and its affiliated company(ies), their directors and
employees and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such
securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s)
are completely independent of the views of the affiliates of MOSt even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a
company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set of customers having various objectives, risk profiles, investment horizon,
etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all
responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses,
costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. Any statements
contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been
reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis,
MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in
any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied
warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own
investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary
explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any compensation for products or
services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this report. To enhance
transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
Pending Regulatory inspections against Motilal Oswal Securities Limited:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold inquiry and adjudge violation of
SEBI Regulations; MOSL replied to the Show Cause Notice whereby SEBI granted us an opportunity of Inspection of Documents. Since all the documents requested by us were not covered we have requested to SEBI vide our letter dated June 23,
2015 to provide pending list of documents for inspection.
List of associate companies of Motilal Oswal Securities Limited -Click
here to access detailed report
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the
specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive compensation based upon various factors,
including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
GSK PHARMA
Analyst ownership of the stock
No
Served as an officer, director or employee -
No
A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes
GSK Pharma
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject
MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC) pursuant
to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets
(Hong Kong) Private Limited for distribution of research report in Kong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document
relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt
from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a registered
investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption
under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be
acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in only with major institutional investors.
In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to
conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant
to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore, may not be subject to
NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a subsidiary of Motilal
Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the Financial Advisers Regulations and the
Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
Kadambari Balachandran
kadambari.balachandran@motilaloswal.com
(+65) 68189233 / 65249115
28 July 2016
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
Motilal Oswal Securities Ltd
10