Buy Abbott India; target of Rs 22,780: Sharekhan

Sharekhan's research report on Abbott India

Abbott India Limited (Abbott) reported strong performance in Q2FY23, with revenue and PAT growing by 13% and 38% y-o-y, respectively, while EBITDA margin expanded by 364 bps y-o-y to 24.9%. The company delivered strong operating performance in Q2FY2023 as major operating costs declined on y-o-y basis, leading to improvement in the EBITDA margin, despite a 108 bps y-o-y decline in the gross margin. Employee/other expenses were lower by 4.7%/11.7% y-o-y, respectively. Revenues and earnings are expected to clock a strong 12% and 16% CAGR over FY2022-FY2025E led by healthy growth prospects, a strong debt-free balance sheet and strong brand equity built over the years.

Outlook

We maintain a Buy on the stock with an unchanged PT of Rs. 22,780. The stock currently trades at 44.9x/38.7x its FY2023E/FY2024E EPS.