Hold Abbott India; target of Rs 7250: Centrum

Centrum's research report on Abbott India

We recently organised a Management Meet of Abbott India (AIL) for our clients and came out with a positive note. We maintain Hold rating for AIL due to rich valuations. We maintain TP of Rs7,250 (earlier TP Rs7,250) based on 24x March’20 EPS of Rs302.2. AIL is committed to variety of services and has a value added model. We expect margins to improve post the launch of new products and with the company’s thrust to the high-margin vaccine segment. Abbott in India has presence in 80-90% of the therapy areas. AIL’s top 10 brands contribute 72% of its revenues.

Outlook

We maintain Hold for AIL with TP to Rs7,250 based on 24x March’20E EPS of Rs302.2. We expect AIL to perform well due to its strong brands, new product launches and thrust to the high-margin vaccine segment. Key negative risk to our assumptions are a slowdown in the domestic market and key positive risk includes faster growth of its major brands.