>GLAXOSMITHKLINE CONSUMER HEALTHCARE (INDIA INFOLINE)

Leads malted food beverage segment with 70% market share
GSKCH dominates the ~Rs20bn MFB market with its brands - Horlicks, Boost, Maltova and Viva. GSKCH continues to leverage on the strong brand equity of Horlicks and Boost by introducing value added variants of these brands. These variants will be priced at 15-20% premium over existing products. G

New launches from parent's portfolio to diversify revenue base
GlaxoSmithKline plc. U.K. the parent company of GSKCH has a strong and well established product product portfolio of various brands such as Ribena, Sensodyne, Aquafresh, Lucozade, Breathe Right etc. GSKCH plans to launch few products from its parent's portfolio over the next 2-3 years. These products are expected to have a strong demand potential in the Indian market and we believe it will help the company in further strengthening its position in the Indian market.

Huge cash balance indicative of liberal payout policy
With zero debt on its books and operating cash flows of about Rs2bn per annum, GSKCH is a cash rich company. At the end of CY08, it had ~Rs4.7bn (Rs112/share) cash on its books. The company is expected to incur a capex of Rs1.3bn p.a. (maintenance and capacity expansion). We believe that the surplus cash would be utilized to acquire businesses/brands or to reward shareholders in the form of higher dividend payout or a buyback. The company is actively scouting for acquisitions in segments such as nutrition, medicinal and OTC products.

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