GSK Consumer
The market was very disappointed with the performance of GSKConsumer Healthcare for Q4FY16. Its net profit showed a 8% (YoY) decline at Rs.181 crore on a 10% drop in net sales at Rs.1053 crore. The phasing out of fiscal benefits from its Baddi plants is what pulled down the topline and consequently the bottomline. Raw material costs were down 6% but advertising costs rose 5% and employee costs showed a sharp rise of 16%. Operating profit dropped 8% at Rs.220 crore.
For FY16, GSK's net profit grew 18% at Rs.687 crore tough net sales showed a marginal fall – down less than 1% at Rs.4107 crore.
Most FMCG companies, which depend heavily on rural India for driving their performance are showing the strain due to poor monsoon. We could see more pain in Q1FY17 too as the effects of drought will be seen on companies like GSKConsumer.
GSKConsumer fundamentally remains a strong MNC. Its equity is at Rs.42 crore and its EPS for the year came in at Rs.163 (FV of Rs.10). A debt free company, cash as at 31st March 2016 stood at Rs.2712 crore.