Buy Pfizer India; target of Rs 5655: Anand Rathi

Anand Rathi's research report on Pfizer India

On its better hospitals and vaccine performances, Pfizer’s Q3 FY21 sales grew 10.3% y/y to Rs.5.9bn. Its gross margin expanded 149bps y/y to 64.2%, while the EBITDA margin expanded 836bps y/y to 33.2% on account of lower promotional costs. Lower other income and a higher tax rate reduced adj. PAT growth to 19.8% (Rs.1.4bn). We expect sales growth of key brands (Gelusil, Prevenar-13, Becosules, Magnex, Dolonex and Meronem) to accelerate in FY22. The stock trades at attractive valuations of 36x/31.7x FY22e/FY23e earnings.

Outlook

We upgrade our rating to a Buy with a target of Rs.5,655.