This Large Cap Pharma Stock Is Axis Securities’ Top Pick of The Week: Here’s Why

This Large Cap Pharma Stock Is Axis Securities’ Top Pick of The Week: Here’s Why

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Key investment rationale for Abbott India Ltd (AIL) according to Axis Securities

  • Abbott India reported average growth of 11% as compared to IPM growth of 5.8% during month of October and November for year 2021. Abbott India has outpaced the industry growth by 520 bps during last 2 months. Gastrointestinal segment reported strong growth of ~30% led by normalcy in OPD operations in the country. Duphaston (Gynecological) sales have been stabilized as it received competition from Mankind.
  • The company retained the leading position (90%) in the respective therepies that involves women’s health, gastroenterology, metabolics, pain management, CNS, and vaccines. Abbott India Ltd has leadership position in 9 top brands out of 10 in their respective therepies. Products like Diegene, Brufen, Cremaffin, Influvac reported strong growth based on new features added.
  • AIL reported healthy cashflow generation of Rs 470 Cr in H1FY22 that has increased the cash to Rs 2,250 Cr in the company’s Balance Sheet. The overall improvement in the Operating Margins in H1FY22led led to higher return on capital employed (RoCE). Branded business is expected to improve overall profitability. The company has strong FCFF at 65.0% of earnings before interest, taxes, depreciation, and amortization (EBITDA) with high return ratios and dividend payout.

Buy With A Target Price of Rs. 20,000

Buy With A Target Price of Rs. 20,000

Abbott India’s continuous endeavor to move from awareness to compliance to lifestyle modification has resulted in its success in the industry. The above strategy has led Abbott India’s branded business to grow 1.5x -1.8x of the industry growth. We recommend BUY with a TP of Rs 20,000/share, said the brokerage in its research report.

Disclaimer

Disclaimer

The above stock has been picked from the brokerage report of Axis Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Original news source Credit: www.goodreturns.in



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