Buy Abbott India: target of Rs 19,065: ICICI Direct
ICICI Direct is bullish on Abbott India recommended buy rating on the stock with a target price of Rs 19,065 in its research report dated November 11, 2020.
November 12, 2020 / 06:09 PM IST
ICICI Direct's research report on Abbott India
Q2FY21 results were a mixed bag. While margins, profitability were better than our estimates, revenues were lower due to slowdown in some therapeutic areas due to extended lockdown and lower footfalls at clinics. Revenues remained muted at Rs 1054 crore. EBITDA margins expanded 344 bps YoY to 22.8%, mainly due to 253 bps improvement in gross margins to 45.5% and lower other expenditure. EBITDA grew 17.7% to Rs 240.4 crore. Net profit grew a mere 1.1% YoY to Rs 180.4 crore. Delta vis-à-vis EBITDA was mainly due to higher tax rate (25.9% against 17.5% in Q2FY20).
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 ten years). We maintain BUY and arrive at a target price of Rs 19065 based on 40x FY23 EPS of Rs 476.6.
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