Pfizer Ltd - Q2FY21 Company Update - ICICI Securities

Q2FY21 revenues grew 5% YoY to Rs. 595 crore. Adjusting for divesture of rights & interests in certain brands and Covid-19, YoY growth for the quarter was at 10.1%. Also, hospital and vaccines business reflected improved performance due to easing of lockdown. EBITDA margins expanded 520 bps to 34.1% YoY due to a better overall operational performance. Decline in other expenses is likely on account of lower promotional & marketing activities. Hence, EBITDA grew 23.8% YoY to Rs. 203 crore. However, PAT de-grew 14.8% YoY to Rs. 131 crore. Delta vis-à-vis EBITDA was due to lower other income, higher tax rate (28.2% vs. 14.9% in Q2FY20).

Valuation & Outlook

Revenues were in line with I-direct estimates whereas profitability was higher due to better-than-expected operational performance. Despite divestiture of certain brands in earlier quarters and Covid-19 related operational challenges, the company continues to deliver a decent set of numbers. Pfizer is following a measured approach with de-focusing and hiving off of tail brands and focusing on core strengths areas such as vaccines, pain management, vitamins, GI and CVS. Similarly, the company is continuously trying to enhance the share of the parent's global products portfolio, which has grown from ~36% in FY17 to ~49% as of FY20. The vaccines segment, led by Prevnar 13, especially, remains at the core of future growth and new launches. We continue to believe in Pfizer's strong growth track record in power brands and capability in new launches on a fairly consistent basis (recent launches from parent's staple- Zavicefta, Zinforo, Meronem (all anti-infective), Eliquis (CVS), Xeljanz (pain management) among others). We maintain BUY recommendation and arrive at a target price of Rs. 5890 based on 40x FY22 EPS of Rs. 147.3.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Pfizer_CoUpdate_Nov20.pdf

Shares of PFIZER LTD. was last trading in BSE at Rs.4960 as compared to the previous close of Rs. 4985. The total number of shares traded during the day was 2091 in over 668 trades.

The stock hit an intraday high of Rs. 5043.15 and intraday low of 4950. The net turnover during the day was Rs. 10420454.

Source : Equity Bulls

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