GlaxoSmithKline Consumer Healthcare Ltd is an Indian associate of GlaxoSmithKline, the world's leading research-based pharmaceutical and healthcare company. GlaxoSmithKline is a leader in the worldwide consumer healthcare market. With nearly $5 billion in sales, over ten $100 million brands and presence in 130 markets, the consumer healthcare business brings an added dynamic dimension to GSK. Company was incorporated at Mumbai on 8th December
1948 under the name Group Laboratories (India) Pvt. Ltd. Company manufactured dairy and milk products, toiletries and drugs and pharmaceuticals in starting of its operations. Dairy products are marketed under the name "Horlicks", "Elaichi Horlicks", "Horlicks Tablets", Boost and Gopika ghee. Name of the Company changed from Smithkline Beeacham Consumer Brands Ltd. to Smithkline Beecham Consumer Healthcare Ltd in 1994. SmithKline Beecham Consumer Healthcare Ltd set up a state of the art spray drying malted food plant at Sonepat in Haryana. Company also launched Junior Horlicks for young and flavor variants like elaichi and chocolate. Company launched the "Horlicks Plus" in 2000. After this, Smithkline Beecham Plc merged with Glaxo Wellcome Plc to form GlaxoSmithkline Consumer.

Products & Services:

GSK Consumer is the leader in the 14000 crore Rs. Indian malted beverage market with a market share of over 60%. Company's beverage brand 'Horlicks' is the leading brand of this sector in India and contributes over 70% to the company's revenues. Company's manufactures other brands like 'Boost', 'Viva' and 'Maltova'. Company's subsidiary has well known brands like 'Aquafresh' in oral care segment, 'Eno', 'Iodex' and 'Crocin' in OTC portfolio. GSK has manufacturing facilities at Baddi (HP), Nabha (Punjab), Rajamundry (Andhrapradesh), Sonepat
(Haryana). Except this, company has alliances to manufacture its wide range of products at ballabgarh, banglore, hyderabad, chennai, Guwahati, Rajamundry, Gurgaon etc. Company also launched variant of Horlicks with chocolate/Toffee flavour. Company also re-launched 'Boost Bite' biscuits, 'Horlicks lite' in South India. Viva and Maltova were bought from Jagatjit Industries in
2000. Viva has been positioned as a traditional family health drink while Maltova has been positioned as a tasty chocolate-based drink for children. Boost has also been positioned as an energy drink. Company also launched Women's Horlicks to strengthen its product portfolio in the health drink segment. It is believed that the new product of the company is the only health drink in India with a complete list of micronutrients recommended by the World Health Organization
(WHO) for women between 19 and 50 years of age. The product is priced at Rs 100 for a 200 gm jar and it is available in two flavors - chocolate and caramel. GlaxoSmithKline's share in the branded Health drink market is above 50 percent including all its variants. Company launched Horlicks NutriBar in February, 2009 in three flavours, cereal n milk, choco crispy and nuts n Company has plan to launch its global brands such as energy drink "Lucozade", toothpaste "Sensodyne", vitamin drink "Ribena", and nasal strips and snore relief product "Breathe Right" in India. These products would be introduced in India in a phased manner over the next few years. Some of these will need modification to suit the local regulatory conditions.

Recent developments:

Company is planning aggressive acquisitions and rapid movement into new product categories, helping it double turnover to Rs 40 billion in next two years. To achieve the target, company is looking for a strategic acquisition. Company is also planning to make its cereal bar snacks "Horlicks NutriBar", Rs 1 billion brand within three years.

In September, company formed a USD 2.2 billion deal with Brazil guaranteeing sales of its pneumococcal vaccine for 10 years. Company will provide Synflorix, a vaccine aimed at preventing pneumonia and meningitis. The agreement is a landmark as most drugs are sold over far shorter periods and have a more uncertain pricing structure. It is part of Glaxo's strategy to build its presence in key emerging markets using innovative agreements.

Company is in discussions with the Indian government for introducing its patented drug, Relenza, which is used for the treatment of Influenza A H1N1 (swine flu). With the rise in the number of swine-flu cases, governments across the world are stocking up both the drugs, Tamiflu and Relenza, to treat swine flu.

Valuation:

Company has a consistent track record of dividend payout. At current market price, stock is trading at 16.94 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "GlaxoSmithKline Consumer Healthcare Ltd" for medium to long-term investment prospective.