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Hem Securities

5.30 AM Jan 1st 1970

Abbott India

BSE ID : 500488 NSE ID : ABBOTINDIA

RECOMMENDED PRICE 7958.00

PEAK FROM RECO 24724.95 210.69%

CURRENT PRICE 26222.45 Resource id #18

Abbott India, part of Abbott`s Global Pharmaceutical business, is one of India`s most admired and fastest-growing pharmaceutical companies. Company`s robust plan to launch 100 new products over period of five years coupled with strong sectoral outlook makes stock an attractive destination to deploy the funds in at current level. Hence, we recommend ``Buy`` on the stock with price target of Rs 9560.00 for long term horizon.

Abbott India, part of Abbott’s Global Pharmaceutical business, is one of India’s most admired and fastest-growing pharmaceutical companies. Co provide products across various therapeutic categories such as Women’s Health, Gastroenterology, CNS, Metabolics, General Care, Vitamins, Vaccines, etc. Co’s products are manufactured in India and also sourced from local third-party manufacturers in India.

Strong growth & leadership position in some brands: As company restructured its product portfolio in key business areas –Women’s Health, Gastroenterology, Consumer Care, CNS, Metabolics, General Care & Vaccines among which, women’s health grew by 19.1%, Vaccines grew by 59.7% and Metabolics grew by 15.3% in FY18. Company have been able to grow at 1.6 times the market. Co’s top 10 brands are leaders (at number 1 or 2 position) in their respective segments. Co’s Thyronorm brand (for thyroid preparations) Influvac (influenza vaccine) retains leadership position with more than 50% market share.

Healthy Financial Performance: Company has posted strong growth in Q1 FY19 with topline of company displaying decent YoY growth of 20% at Rs 845 Cr while bottomline of company has witnessed whopping YoY growth of 70% at Rs 84 Cr.

New Product launches: Co launched 21 new products in FY18 and aims to launch around 100 products over the next five years as company looks to strengthen existing therapy areas such as gastroenterology, metabolics, vaccines, central nervous system and women's health. As the OTC market is growing strongly at 10.2 % & with the creation of a well-defined & regulated OTC market, coupled with stricter enforcement of prescribing & dispensing regulation, OTC market is all set to achieve growth in coming future. Hence company intends to strengthen its over-the-counter portfolio with a wider range of product profiles.

The company is currently trading at 38.84x of TTM eps of Rs 204.90 while it is trading at 29.77x of FY19E eps & 25.32x of FY20E eps. Company’s fundamentals looks quite strong with zero debt in its book. Company’s robust plan to launch 100 new products over period of five years coupled with strong sectoral outlook makes stock an attractive destination to deploy the funds in at current level. Hence, we recommend “Buy” on the stock with price target of Rs 9560.00 for long term horizon.

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Abbott_india_Hem.pdf