GLAXO - Investment Analysis
Last Updated Time : 02 Aug 25, 12:58 am
Back to Investment List📊 Investment Analysis: GlaxoSmithKline Pharmaceuticals Ltd. (GLAXO)
Investment Rating: 3.8
🔍 Long-Term Investment Outlook
GLAXO presents a financially strong, low-debt profile with impressive profitability metrics—but valuation concerns and growth inconsistency temper long-term enthusiasm.
✅ Strengths
ROCE: 63.2% | ROE: 46.9% — Exceptional capital efficiency and shareholder value generation.
Debt to Equity: 0.01 — Virtually debt-free; strong balance sheet.
EPS: ₹54.8 — Healthy earnings per share, well above sector average.
Quarterly PAT Growth: +36.4% — Strong recent performance momentum.
Dividend Yield: 1.33% — Reasonable income-generating potential.
FII Interest ↑ (+0.37%) — Institutional confidence.
⚠️ Concerns
High P/E: 61.0 vs Industry PE: 34.0 — Aggressive valuation; priced for high growth.
PEG Ratio: -3.11 — Implies declining earnings despite high P/E; red flag for growth investors.
MACD: -33.0 — Indicates weakening short-term momentum.
Price Near DMA 50 (₹3,158) — Limited immediate technical upside.
Book Value: ₹115 vs CMP ₹3,150 — Indicates heavy market premium.
🎯 Ideal Entry Price Zone
₹2,800–₹2,950
Close to 200-DMA; offers better valuation comfort.
RSI at 46 suggests neutral territory—wait for stability confirmation or MACD improvement.
🧭 Strategy for Existing Holders
⏳ Holding Period
24–36 Months
Particularly viable if you're looking for a defensively positioned pharmaceutical play with consistent dividend payouts and resilient margins.
🚪 Exit Strategy
Exit Zone: ₹3,500+
Exit Triggers
PEG continues negative for next 2 quarters.
ROE drops below 30%, indicating margin compression.
MACD fails to recover and RSI dips below 40, signaling momentum breakdown.
Price falls below ₹2,750 with volume spike, suggesting institutional exit.
🧠 Final Thought
Glaxo feels like a stable but richly priced stalwart—great for conservative investors chasing predictable returns, but not ideal for aggressive long-term growth seekers. If you're in, you’re in a resilient boat, just make sure you're not overpaying for calm waters.
Would you like a comparison with Sun Pharma or Cipla to position GLAXO more clearly?
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