Abbott India - Q2FY21 Company Update - ICICI Direct

Q2FY21 results were a mixed bag. While margins, profitability were better than our estimates, revenues were lower due to slowdown in some therapeutic areas due to extended lockdown and lower footfalls at clinics. Revenues remained muted at Rs. 1054 crore. EBITDA margins expanded 344 bps YoY to 22.8%, mainly due to 253 bps improvement in gross margins to 45.5% and lower other expenditure. EBITDA grew 17.7% to Rs. 240.4 crore. Net profit grew a mere 1.1% YoY to Rs. 180.4 crore. Delta vis-à-vis EBITDA was mainly due to higher tax rate (25.9% against 17.5% in Q2FY20).

Valuation & Outlook

Covid-19 related disturbances notwithstanding, 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 ten years). We maintain BUY and arrive at a target price of Rs. 19065 based on 40x FY23 EPS of Rs. 476.6.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Abbott_CoUpdate_Nov20.pdf

Shares of ABBOTT INDIA LTD. was last trading in BSE at Rs.15600 as compared to the previous close of Rs. 15371.9. The total number of shares traded during the day was 718 in over 392 trades.

The stock hit an intraday high of Rs. 15626 and intraday low of 15350.5. The net turnover during the day was Rs. 11164633.

Source : Equity Bulls

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