Buy Pfizer; target of Rs 5890: ICICI Direct

ICICI Direct's research report on Pfizer

Q2FY21 revenues grew 5% YoY to Rs 595 crore. Adjusting for divesture of rights & interests in certain brands and Covid-19, YoY growth for the quarter was at 10.1%. Also, hospital and vaccines business reflected improved performance due to easing of lockdown. EBITDA margins expanded 520 bps to 34.1% YoY due to a better overall operational performance. Decline in other expenses is likely on account of lower promotional & marketing activities. Hence, EBITDA grew 23.8% YoY to Rs 203 crore. However, PAT de-grew 14.8% YoY to Rs 131 crore. Delta vis-à-vis EBITDA was due to lower other income, higher tax rate (28.2% vs. 14.9% in Q2FY20).

Outlook

We maintain BUY recommendation and arrive at a target price of Rs 5890 based on 40x FY22 EPS of Rs 147.3.