Buy Abbott India; target of Rs 32000: Sharekhan

Sharekhan's research report on Abbott India

Earnings were in line with our estimates, where sales grew by 5% y-o-y to Rs 1,557 crore (1.6% below our estimates), EBITDA grew by 10% y-o-y to Rs 3,910 crore (0.4% below our estimates), while PAT grew by 12.7% y-o-y to Rs 327 crore (1.3% above our estimates).- Sales growth was driven by retaining leadership position in its key segments like Diabetes, Gastro-intestinals, etc. Healthy product mix and lower raw material costs drove up gross margins by 130 bps y-o-y to 45.7% and a 110 bps y-o-y rise in EBITDA margins (30 bps above our estimates).

Outlook

At CMP, the stock trades at ~43x/ 38.7x its FY2025E/FY2026E EPS of Rs 633 and Rs 704 per share respectively. Due to superior margin profile and healthy PAT growth, we ascribe a multiple of 45x on FY26E to maintain our PT of Rs. 32,000.