We introduce CY16f estimates. We estimate sales growth at 13-14% over the next three years, with a 569 bps expansion in ebitda margin over CY13-16f. A lack of visibility on inorganic moves, and intent for higher capex should limit P/E expansion, in our view. Consensus EPS estimates for CY14f have been cut ~30% over the past 12 months and further cuts following the quarterly results will adversely impact stock performance.
Glaxos Q1 results fell short of expectations. Sales of R600 crore were ~12% below our estimate of R680 crore and ~10% below the consensus estimate of R660 crore. Ebitda was R108 crore, ~28% below our estimate of R150 crore and ~30% below the consensus estimate of R154 crore. PAT came in at R96.5 crore, 24% below our estimate of R128 crore and ~30% below the consensus estimate of R137 crore. Revenue growth also disappoints.