GlaxoSmithKline Pharma recouped its Wednesdays' decline after the company turned out a minor loss for Q4, small in comparison to the loss made in the corresponding previous quarter.

The favourable outcome saw the scrip of the pharma MNC add on 2.3% to Rs 298.40 on BSE in early trades today. It moved between a high of Rs 299.95 and a low of Rs 295 in the mean time. On Wednesday, the scrip closed at Rs 291.50. A total of 3,765 GlaxoSmithKline Pharma shares changed hands on BSE in around half-an-hour of trading .

On Wednesday, the scrip was hurt by the broad decline in the market, slipping by 1.6%. The result of the weak sentiment was that the scrip found no succour from its improved Q4 results (announced towards close of trading).

GSK has been sluggish over the last few months, but some value buying at the lower levels prompted a revival of sorts. Much volatility has, however, marked the counter. After hitting a 52-week low of Rs 281.15 on 17 February 2003, the scrip surged 12% to Rs 314.95 on 27 February 2003. Ever since, the scrip has been see-sawing.

GSK has turned out an improved performance for Q4 ended 31 December 2002 (the company follows the calendar year as its accounting year). For the quarter ended 31 December 2002, the pharma MNC posted a small loss of Rs 2.57 crore on total income Rs 227.16 crore (Rs 2.27 billion). The board of directors also declared a dividend of Rs 7 per share for FY 2002.

The loss in Q4 was the result of an outgo of Rs 25 crore on VRS at its Ankleshwar facility. Net profit before exceptional items for the quarter, in fact, rose by almost 84% to Rs 22.60 crore. The fall in sales in Q4 was attributed to the overall economic slowdown.

For the year ended 31 December 2002, the company posted a net profit of Rs 98.06 crore on total income of Rs 1,046.90 crore (Rs 10.46 billion).

There have been concerns that domestic sales of pharma companies may be adversely affected due to the introduction of the uniform Value Added Tax regime, at the rate of 12.5%, from 1 April 2003, replacing the sales tax levied by various state governments. Due to this, the off-take of pharma products by the trading community is believed to have declined considerably. This is expected to affect the quarter ending 31 March 2003 results of most pharma companies in the Indian market.

GSK has decided to focus its brands in segments like anti-asthma and anti-infection drugs, vitamins and vaccines. These are expected to contribute 65-70% to the company's turnover in the next 2-3 years, from the current 60%.

GSK's core pharma division accounts for 81% of the company's sales, while the remaining 23% comes from other divisions which include animal healthcare products among others.

Meanwhile, the Union Budget for 2003-04 is likely to benefit the company following the reduction in customs duties for life-saving drugs and also from the cut in import duty on raw materials and finished dosages from 25% to 30%.

GSK is the merged entity of the erstwhile Glaxo India and SmithKline Beecham Pharmaceuticals India. The Indian merger followed the international merger of GlaxoWellcome and SmithKline Beecham to create GlaxoSmithKline last year.

As on 31 December 2002, the promoter held 48.83% stake in GPL, while the public and institutions held 22.83% and 23.95% respectively.