GlaxoSmithKline posts Rs 79.75 cr net profit in Dec quarter

GlaxoSmithKline Consumer Healthcare today posted a 15 per cent jump in October-December quarter net profit at Rs 79.75 crore on volumes growth.

The company, which sells nutrition powders like Boost and Horlicks, had posted a post tax net of Rs 69.65 crore in the corresponding period last year.

Company's Managing Director Zubair Ahmed said the profit growth was driven by an expansion of 18 per cent in the top line at Rs 839 crore in spite of the difficult macro environment.

"We achieved that on the back of volume growth of 13 per cent, while the remaining five per cent came from price rise," he said.

Ahmed said both Boost and Horlicks did well and the company's strategy of differentiation and introduction of targeted brands has paid off well. Horlicks for women has registered a growth of 60 per cent in sales, he added.

He said growth in the rural business at 25 per cent outpaced the overall business growth, but the stream accounts for only "single digits" of the overall revenue pie.

The company scrip gained 1.28 per cent to close at Rs 4,356.40 a piece on BSE.

The company's advertising and promotion expenses increased to Rs 164.78 crore during the reporting quarter, from the year ago's Rs 132.66 crore.

Ahmed said the company continues to keep its ratio of advertising to sales at the 14-15 per cent levels and has not cut on spends in this aspect.

He, however, refused to directly answer questions around celebrity endorsements and if the company will continue with this strategy.

GSK is different from other brands because it uses only sport persons, and not any celebrity, to endorse products centred around fitness. Additionally, there is clinical data available with the company on which the claims are based, Ahmed said.

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