Expectations of an encouraging performance pushed Smithkline Beecham's scrip from Rs 380 to an intra-day high of Rs 455 on Bombay Stock Exchange (BSE) on Monday, before the scrip slipped along with the general correction to close the day at Rs 437.50. On the National Stock Exchange, the scrip after touching a high of Rs 441 closed the day at Rs 425. Usually the second half ended Decmeber has been a better year for the company, but in the current financial year, the company's growth is likley to surpass market expectations, according to market sources.

The market also expects a higher interim dividend from Smithkline Consumer which stoodat 20 per cent last year. The dividend last year was paid on an increased equity of the company resulting from a 3:5 bonus that was declared earlier in 1997. Last year, the company's net profit for the first six-month ended June 30, 1997 increased by 19.3 per cent to Rs 25.16 crore from Rs 21.10 crore in the corresponding period of the previous year. However, net profit during the second half was substantially higher at Rs 36.87 crore. During the first half of last year, the company's turnover grew by Rs 56.5 crore to Rs 266.57 crore, an increase of 27 per cent. Turnover stood at Rs 297.6 crore for the second half ended December 1997.

The Delhi-based company, known as a producer of nutritional drinks Horlicks and Boost, has shelled out Rs 19.55 crore royalty during 1997, as against Rs 3.85 crore in 1996. However, the company despite this huge outflow managed to improve its operating margins.

The Beecham group of UK holds 40 per cent stake in the company, which manufactures and markets malted milk foodproducts under the brand names Horlicks and Boost. Its product range includes Gopika Ghee and biscuits among others. Malted food drinks is the core business activity accounting for 90 per cent of turnover. Horlicks enjoys 54 per cent market share and accounts for almost 75 per cent of the company's total turnover. Boost follows with a 10 per cent share and both together account for 64 per cent share of the domestic market. Comlan, a competing brand, enjoys a 12 per cent market share followed by Cadbury's Bournvita and Nestle's Milo.

Smithklie Consumer is gearing up to increase its share in the malted food drink industry by leveraging the Horlicks brand and launching variants aggressively. Its strategy has been to consolidate by introducing more variants to tap niche segments. During the last fiscal it had launched Junior Horlicks, Horlicks three-in-one and Horlicks for pregnant mothers. The company has made investments in marketing and upgrading various plants and processes to remain a low-cost producer.Recently it commissioned an Enterprise Resources Planning (ERP) software which will help optimise resources deployed within the business.