GSK Consumer Healthcare net up 12.53% in April-June quarter

Total income grew 18.02% to Rs 928.33 crore during quarter under review

GlaxoSmithKline (GSK) Consumer Healthcare Ltd, on Thursday, reported a 12.53% rise in standalone net profit at Rs 119.96 crore for the April-June quarter. It had reported a net profit of Rs 106.6 crore in the corresponding quarter previous fiscal year.

Its total income grew 18.02% to Rs 928.33 crore during the quarter under review.

Its net sales increased by 16.88% to Rs 852.92 crore in the quarter under review as against Rs 729.73 crore in the corresponding period previous year.

GSK Consumer Healthcare, which is a leading player in the malted food drinks segment with brands like Horlicks, Boost, Viva and Maltova, has spent 18.49% more money in advertising and promotion expenses during the quarter.

“Over the last few months, we have been focusing not only on base products but also value-added products, which are designed to address specific needs of the consumer. These specialised products are the next level of offering for consumers who are looking at focused benefits for their family. Products such as Women’s Horlicks, Mother’s Horlicks, Horlicks ProMind and Horlicks Nutribic, have contributed to the company’s growth,” Zubair Ahmed, MD, GSK Consumer Healthcare India, said in a statement.

Its asvertisement and promotion spend stood at Rs 137.56 crore during April-June quarter as against Rs 116.09 crore in the same period last year. Overall expenses of the company in the quarter stood at Rs 746.46 crore, up 18.93%, as against Rs 627.6 crore in the corresponding period last year.

“We have also been concentrating on driving deeper penetration across categories which has also contributed to the overall growth of the brands. Furthermore, cost-efficient engineering programmes have helped the Company deliver progressive result,” said Ahmed. According to the company, its health drink products currently hold a market share of 65.2% (till June 2013).

“GSK Consumer Healthcare’s performance was below expectations on bottom-line front. The top-line rose by both higher volumes and better realisations. The price hikes undertaken by the company in past one year resulted in better realisations. But, increase in advertising and promotional spend impacted its margins,” said V. Srinivasan, FMCG analyst Angel Broking.

Shares of GSK Consumer Healthcare last traded at Rs 4,598 a piece, down 1.92% on the Bombay Stock Exchange (BSE), on Thursday.