December 01, 2016 / 10:37 IST
We maintain Hold rating for Abbott India (AIL) with a TP of Rs 4,480 based on 24x March’18 EPS of Rs 186.7. AIL results were in line with our expectations. The company reported 12%YoY growth in revenues, 120bps improvement in margin to 14.5% and 23%YoY growth in net profit. The company’s eight leading brands grew faster than the market and are likely to drive future growth. We expect margin improvement from the launch of 17 new products in FY16 and with the entry in high-margin vaccine segment. We recommend a switch to Sanofi India or Aurobindo Pharma.
We expect AIL to perform well due to its strong brands, new product launches and entry into the high-margin vaccines segment. Key risks to our assumptions are slowdown in the domestic market and key upside risk would be faster growth of its brands. We recommend a switch to Sanofi India or Aurobindo Pharma.
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