Abbott India Ltd. share price target

We reduce earnings by 1.4% and -4.5% for FY22E and FY23E respectively and recommend Hold with target price of Rs 15,700.

We expect revenue and PAT CAGR of 10.6% and 14.0% over the period FY20-FY23E and recommend BUY with target price of INR 18,500.

Abbott India Ltd' (AIL) strategy of Going Digital and Services beyond the pill is the key differentiator and game changer for the company. AIL' continuous endeavour to move from awareness to compliance to lifestyle modification has resulted in its success in the industry.

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...

the expert clinical support to customer need. Company derives 63% revenue from brands and 37% from Insulin. Company's top 10 brands...

On the business front, despite the nationwide lockdown, domestic growth is expected to remain more or less stable. Exports growth, barring for one or two months due to congestion in all major ports globally, is also expected to remain strong due to 1) currency benefit, 2) slowdown in competition due to delay in new approvals that will be beneficial for existing players and 3) expected demand continuum across the world despite Covid-19. Some windfall is also expected in some critical productsa case in point is Hydroxychloroquine, a malaria drug that is likely to be repurposed as a prophylaxis for Covid-19 treatment in some cases....

Power brands continue to grow ahead of industry growth Abbott India is the fastest growing listed MNC pharma company. It has outperformed the industry on a consistent basis in women's health, GI, metabolic, pain, CNS and vaccines. The company's top 10 brands including (Duphaston- gynaecological, Thyronorm thyroid, Udiliv, Vertin and Duphalac GI) have together registered a revenue CAGR of ~18% during December 2015-19 (MAT basis). This has led their combined contribution in total revenues to grow from 51% in December 2015 to ~60% in December...

The domestic pharma industry is expected to grow in the range of 9-11% per annum. Issues such as NLEM and other regulatory aspects are mostly in the price. On the flip side, the looming threat of Jan Aushadhi and trade generics are some headwinds at this juncture. However, we continue to believe in Abbott's strong growth track in power brands and capability of new launches on a fairly consistent basis (100 products in the last 10 years). We expect revenues, EBITDA and PAT to grow at ~13%, 21% and 25%...

Abbott India Ltd. is a healthcare company that discovers, develops, manufactures and markets various products in area of pharmaceuticals. The company has in-house development and medical teams to undertake product and clinical development tailored to the needs of the Indian market. Their Product range is classified in three segments namely Primary care segment i.e. products in the areas of Pain Management, Gastroenterology; Care segment i.e. Metaboloics Urology, Neurology and Psychiatric solutions in the areas of Thyroid, Obesity, Diabetes and...

Power brands continue to grow ahead of industry growth The domestic pharma market (~| 1.3 trillion AIOCD MAT July 2019) is growing at 9-10% YoY. Branded generics dominate the pharmaceuticals market, constituting nearly 80% of market share in terms of revenue. Abbott India's top five brands have together registered a revenue CAGR of ~20%, leading combined contribution to Abbott India's sales to grow from 26% in March 2015 to nearly 34% in March 2019. Thus, it is evident that revenue growth has been driven by top brands (power brands) despite one of its top...