Buy Abbott India, target price Rs 31,420: Axis Securities

Axis Securities has a buy call on Abbott India Ltd. with a target price of Rs 31,420. The current market price of Abbott India is Rs 28306.4. Abbott India, incorporated in 1944, is a large cap company with a market cap of Rs 59800.85 crore, operating in Pharmaceuticals sector.

Abbott India's key products/revenue segments include Pharmaceuticals, Other Operating Revenue, Scrap and Export Incentives for the year ending 31-Mar-2024.

Financials


Drugmaker Abbott India reported a 24% rise in fourth-quarter profit on Thursday, as strong sales outpaced the impact of government pricing caps on certain medicines. The company, which makes the popular antacid medicine Digene, said its profit rose to Rs 2.87 billion ($34.3 million) for the three months ended March 31, from Rs 2.31 billion a year earlier.

Abbott, which is a unit of U.S. healthcare firm Abbott Laboratories, has been trying to mitigate the impact of pricing curbs by driving up sales and cutting back on expenses.

The company, which makes drugs including hypothyroidism treatment tablets Thyronorm, said its revenue from operations rose 7% to Rs 14.39 billion in the fourth quarter. The company declared a dividend of 410 rupees per share for fiscal year 2024.

Investment Rationale
Abbott India's 'Beyond the Pill? strategy, which encompasses consumer education, diagnosis, treatment, and compliance, is anticipated to drive continued growth. The company is growing 1.2 to 1.5 times faster than the IPM due to its strong brand recognition and excellent product portfolio. Axis Securities recommends a BUY with a target price of Rs 31,420/share (46.5x P/E for FY26E), implying an upside of 10% from the CMP.

Promoter/FII Holdings
Promoters held 74.99 per cent stake in the company as of 30-Sep-2024, while FIIs owned 0.17 per cent, DIIs 8.93 per cent.