GlaxoSmithKline Pharmaceuticals fair value — is it overvalued?
The fair value of GlaxoSmithKline Pharmaceuticals (GLAXO), built from its filed accounts — ten years of results, the method that fits this business, and what today's price already assumes.
The market expects GlaxoSmithKline Pharmaceuticals to do better than it ever has.
At today’s share price, buyers are assuming GlaxoSmithKline Pharmaceuticals grows about 25% a year, forever. Over the last ten years it actually grew about 4% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
What the market is assuming
Worked backwards from today's share price: the growth today’s price implies for GlaxoSmithKline Pharmaceuticals, against what the model assumes.
How to read this. The number on the left is the growth today’s share price quietly takes for granted. The number on the right is what the model actually assumes. When the two are far apart, that gap is the bet you would be taking.
Ten years, in charts
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
The numbers behind them
Revenue and net profit as filed, in ₹ crore.
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 2,896 | 351 | 12.1% |
| FY2019 | 3,128 | 445 | 14.2% |
| FY2020 | 3,224 | 93 | 2.9% |
| FY2021 | 3,199 | 358 | 11.2% |
| FY2022 | 3,278 | 1,695 | 51.7% |
| FY2023 | 3,252 | 611 | 18.8% |
| FY2024 | 3,454 | 590 | 17.1% |
| FY2025 | 3,749 | 928 | 24.7% |
| FY2026 | 3,822 | 1,036 | 27.1% |
How this company gets valued — and why
This business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
Discounted cash flowUnderstand this method
- How to Value a Company Using DCF: A Practical Guide for Indian Investors
- Free Cash Flow Explained: The Number Behind Every Valuation
- WACC and the Discount Rate, Explained Simply
- How every one of our pharma & healthcare stocks is valued
The complete valuation
Unlock the complete valuation report
- ✓Fair value per share — with the full working behind it
- ✓Bull, base and bear cases — and what moves between them
- ✓Every assumption — growth, margins, cost of capital, with sources
- ✓Peer comparison — how rivals are priced on the same measures
- ✓Downloadable PDF report — the full write-up, yours to keep
Frequently asked
Is GlaxoSmithKline Pharmaceuticals overvalued?
At ₹2,819 the market is pricing in roughly 25% sustained growth, against the ~4% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of GlaxoSmithKline Pharmaceuticals?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
Is GlaxoSmithKline Pharmaceuticals a good long-term investment?
Revenue went from ₹0.03 lakh crore to ₹0.04 lakh crore over the period shown, while return on equity moved from 22.6% to 116.3%. Growing scale on a rising return is a very different proposition from growing scale on a falling one.
How much debt does GlaxoSmithKline Pharmaceuticals carry?
Debt to equity stands at 0.00, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.
How does FairStocks calculate fair value?
From published financial statements. The method is chosen to fit the business — a bank on excess return, a regulated utility on its rate base, a conglomerate by its parts — and every assumption is shown with its source. When the numbers do not support an estimate, no estimate is published. This is an educational research tool: it reports what the model computed and does not recommend buying or selling anything.
What assumptions are used to value GlaxoSmithKline Pharmaceuticals?
A cost of capital of 9.68%, growth drawn from the company's own record rather than from guidance, and the valuation method that fits the business. All of them are listed in the report, with how much each one moves the answer.