Abbott India - Company Update - ICICI Securities

While Q4FY20 results were subdued as the nationwide lockdown marginally impacted availability of raw materials, finished goods and supply chain distribution, overall FY20 revenues grew 11.3% YoY to Rs. 4093.1 crore, mainly due to strong growth in key therapies & power brands. EBITDA margins improved 204 bps YoY to 18.5% mainly due to better operational leverage. EBITDA grew 25.1% YoY to Rs. 756.4 crore. PAT grew 31.7% YoY to Rs. 592.9 crore. Delta vis-à-vis EBITDA was mainly due to lower tax rate.

Valuation & Outlook

Covid-19 related disturbances notwithstanding (likely to impact Q1FY21), companies from the pharma MNC staple like Abbott continue to generate investor's interest with robust and sustainable business model backed by stable growth, debt-free B/S, favourable market dynamics with doctor prescription stickiness and lower perceived risk factors. We continue to believe in Abbott's strong growth track in power brands and capability of new launches on a fairly consistent basis (+100 launches in the last 10 years). We upgrade the stock from HOLD to BUY and arrive at a target price of Rs. 19030 based on 45x FY22 EPS of Rs. 422.8.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Abbott_CoUpdate_Jun20.pdf

Shares of ABBOTT INDIA LTD. was last trading in BSE at Rs.16603.3 as compared to the previous close of Rs. 17082.75. The total number of shares traded during the day was 2940 in over 1615 trades.

The stock hit an intraday high of Rs. 17800 and intraday low of 16200. The net turnover during the day was Rs. 50414333.

Source : Equity Bulls

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