VANTAGE

April 25, 2025

Result Review: GLAXO 1QCY25 EPS Rs6.7

▪ GlaxoSmithKline Pakistan (Glaxo) announced 1QCY25 EPS of Rs6.7 versus EPS Company GlaxoSmithKline Pakistan
of 1.8 during the same period last year, up by massive 3.7xYoY. The jump in Symbol GLAXO
earning is primarily attributable to increase in gross margins to 34% (up
19ppts). Earnings Snapshot - Quarterly
(Rs mn) 1QCY25 1QCY24 D%
▪ During 1QCY25, the company’s topline remained flat at 15.6bn compared to Turnover-net 15,580 15,616 0%
same period last year mainly due decline in volume. Cost of sales (10,254) (13,347) -23%
▪ Thanks to hike in prices and decline in raw material prices, Glaxo’s gross Gross profit 5,326 2,269 135%
Gross margins 34% 15% -
margin sharply increased to 34% during 1QCY25 versus 15% during same
Operating expense (1,911) (1,736) 10%
period last year. Fianance cost (114) (50) 126%
▪ On QoQ basis, earnings fell by 28% mainly due to decline in revenues (lowest Other income 219 477 -54%
quarterly revenue in las 1 year) along with sharp reduction in other income. Profit after taxation 2,127 565 NM
EPS (Rs) 6.7 1.8 NM
▪ Company posted 11%QoQ decline in revenue during 1QCY25 which is likely NM = Not Meaningful
due to reduction in volumes of its flagship products. Our estimates suggest Source: Company Accounts, Sherman Research
that company’s 3 leading antibiotic products posted a cumulative decline of
12% in 1QCY25 compared to previous quarter.
▪ Moreover, other income reported at Rs219mn which is 85% lower than other
income of Rs1.4bn. Just to recall, the company reported higher other income
during previous quarter which included promotional allowance.
▪ However, on QoQ basis, gross margin slightly increased by 1ppts to 34%
during 1QCY25.

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AZEEM AKHUNDZADA| [email protected]
SHERMAN RESEARCH | [email protected] | (+92-21) 38284501
Risks to Valuation:
Risk to valuation includes: 1) Compliance risk . 2) Legal risks. 3) Supply chain disruption risk. 4) Middle East Geopolitical risk.
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Price Methodology:
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Justified Price to Book Value method.
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Sherman Securities employs a 3-tier rating mechanism i.e. Buy, Hold and Sell, which is based upon the level of expected return for a specific stock. Time horizon is usually the
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sell rating is issued. If return is in between the two ranges, hold rating is assigned. Aforementioned ratings are subject to change on the basis of change in stock price, change in
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Rating Interpretation
© Copyright 2025, Sherman Securities (Pvt.) Ltd. Buy ≥ 16.5%
All rights reserved. Sell ≤ -10.0%
Hold Between -10.0% to 16.5%