Buy GlaxoSmithKline Pharmaceuticals; target of Rs 2900: ICICI Securities

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • New launches driving growth: GSK's innovative portfolio, including Nucala, Trelegy, and Shingrix, is gaining traction and now accounts for ~7% of sales.
  • Established brands underpinning growth: The company's general medicine portfolio is witnessing healthy prescription traction and demand, with underlying volume growth of 5-7%.
  • Vaccine segment growing steadily: The vaccine business, including paediatric and adult immunisation, is expected to grow 13.3% over FY26-29E, driven by strong traction in Shingrix and investments in adult vaccination.
  • Oncology portfolio expanding: GSK is strengthening its oncology presence with the launch of Blenrep in Q3FY27 and pursuing additional indications for its oncology assets.

Thesis Validation Checklist

  • Revenue growth: Monitor GSK's ability to sustain double-digit revenue growth, driven by new launches and the expansion of its innovative portfolio.
  • Margin performance: Track the company's ability to maintain its EBITDA margin profile of ~34% despite gross margin pressure from input costs and currency fluctuations.
  • Innovative portfolio traction: Watch for continued traction in GSK's innovative brands, including Nucala, Trelegy, and Shingrix, as well as the success of new launches like Blenrep.
  • Vaccine segment growth: Monitor the growth of GSK's vaccine business, including the performance of Shingrix and the impact of investments in adult vaccination.
  • Oncology portfolio expansion: Track GSK's progress in expanding its oncology portfolio, including the launch of new products and the pursuit of additional indications for its existing assets.