INSUBCONTINENT EXCLUSIVE:
ICICI Securities has given a buy rating to Abbott India with a target price of Rs 18,069/ share (over a CMP of Rs 15,640)
The pharmaceutical industry has not faced any direct impact of Covid-19 until now
on continuity of supplies or logistics
Abbott India is one of its top picks in the pharma sector.
Udiliv and Vertin are among the top 5 products that have reported a healthy price
growth over FY15-FY19 and were the largest contributor to the pricing growth of the company.
The share price of the company moved up by 1.88
per cent from its previous close of Rs 15810.50
The last traded price is Rs 16,108
Incorporated in 1944, Abbott India has a market cap of Rs 33630.42 crore.
Investment RationaleThe Indian pharma industry witnessed a growth
of 12.1 per cent in February 2020 with some benefit from stocking up on medicines in wake of the COVID spread
Concerns over shortage or raw material for manufacturing drugs are also easing with resumption of supplies from China
However, internal logistics are causing some delay due to the nation-wide lockdown, so we expect near term pressure but our long term view
remains intact.
The brokerage believes that the MNC pharmaceutical companies are more resilient to the current environment due to its
domestic exposure which has fared well as compared to the rest of the world
Abbott benefits largely from pricing growth
Udiliv (Gastro) and Vertin (Neuro) are among the top five products for Abbott which have reported a healthy price growth over FY15-FY19 and
were the largest contributor to the pricing growth of the company
Abbott has leading market share in both the products with premium pricing
Abbott India
FinancialsFor the quarter ended December 31, 2019, the company reported standalone sales of Rs 1078.25 crore, up 2.22 per cent
from last quarter sales of Rs 1054.80 crore and up 13.78 per cent from last year's same quarter sales of Rs 947.65 crore
The company reported net profit after tax of Rs 186.69 crore in teh latest quarter.
