Gladiator Stocks - Abbott India: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Abbott India

Strategy

Buy Abbott India in the range of Rs 15300.00–15500.00 for target price of Rs 17920.00 with a stop loss of Rs 13910.00. Time Frame: Six months.

Technical View

The stock, after a sharp up move in April-May, witnessed a breather in the last seven months. It is currently seen forming a higher base at the lower band of the rising channel in placed since May 2019 and the rising 52 weeks EMA (currently at 14950) which has acted as strong support for the stock since CY18. Thus, it offers fresh entry opportunity with a favourable risk reward set up. Time wise it has already taken 30 weeks to retrace just 61.8% of the previous nine weeks rally (Rs 12501 to 18679). A slower retracement signals a robust price structure. We expect the current breather has approached maturity as it has witnessed price and time parity with the previous major decline of 20% in seven months during October 2018 and May 2019 (Rs 8820- 7160). Hence we expect the stock to resume fresh leg of up move and head towards Rs 17920 levels in coming months as it is 80% retracement of the recent decline (Rs 18679-14811).

Fundamental View

Abbott India is one of the fastest growing listed MNC pharma companies. It has outperformed the industry on a consistent basis in women’s health, GI, metabolic, pain, CNS and vaccines. The company’s top five brands including (Duphaston- gynaecological, Thyronorm – thyroid, Udiliv, Vertin, Duphalac– GI) together registered a revenue CAGR of 14.4% during September 2015-20 (MAT basis). This has led their combined contribution in total revenues to grow from 40% to ~43% over September 2015-20. Thus, it is evident that revenue growth has been driven by top brands (power brands). Apart from this, continuous new launches and line extension in existing and new segments is also driving growth. We expect future launches of new products from key divisions, along with brand extensions and access to innovative molecules from global parent to drive growth. Covid-19 related disturbances notwithstanding, companies from the pharma MNC staple like Abbott continue to generate investor’s interest with robust and sustainable business model backed by stable growth, debt-free B/S, favourable market dynamics with doctor prescription stickiness and lower perceived risk factors. 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 10 years).

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