BUY

Result Update Abbott India Ltd

Target Price
16th May, 2025 Pharmaceutical
33,400

Outpacing IPM & Sustaining Higher EBITDA Margins (CMP as of 15th May, 2025)
CMP (Rs) 30,330
Est. Vs. Actual for Q4FY25: Revenue – INLINE; EBITDA Margin – BEAT ; PAT– BEAT
Upside /Downside (%) 10%
Changes in Estimates post Q4FY25 High/Low (Rs) 31,900/25,260
Market cap (Cr) 64,400
FY26E/FY27E: Revenue: -1.3%/-0.5%; EBITDA Abs.:2.2%/4.1%; PAT: 3.2%/5.3%;
Avg. daily vol. (6m) Shrs 10,000

Recommendation Rationale No. of shares (Cr) 2.12

• AIL reported revenue growth of 11.5% YoY in Q4FY25, slightly ahead of the expected Shareholding (%)
Sep-24 Dec-24 Mar-25
9% YoY.
Promoter 75.0 75.0 75.0
• Abbott’s growth of 11.5% outpaced the IPM's growth of 9.0%. An increase in secondary FIIs 0.2 0.2 0.2

sales, along with a higher share of Duphalac, Udiliv, and Rybelsus, which reported QoQ MFs / UTI 7.7 7.8 7.7

growth of 20%, 19%, and 44%, respectively, contributed to the improved market share. Banks 0.0 0.1 0.0
Others 17.2 17.0 17.1
• The company reported EBITDA margins of 26.7%, flat QoQ, but 380 bps expansion
Financial & Valuations
YoY, primarily due to lower COGS.
Y/E Mar (Rs Cr) FY25 FY26E FY27E
Sector Outlook: Positive Net Sales 6,409 7,308 8,090
EBITDA 1,695 1,951 2,192
Company Outlook & Guidance: Abbott India is growing 1.2x to 1.5x faster than IPM, driven by Net Profit 1,414 1,546 1,720
high brand recognition and an excellent product portfolio. EPS (Rs) 665.6 727.6 809.4
PER (x) 45.6 41.7 37.5
Current Valuation: PE 41x for FY27E Earnings P/BV (x) 37.2 32.3 28.4
EV/EBITDA (x) 15.2 12.7 10.5
Current TP: Rs 33,400/share (Earlier TP: Rs 31,000/share)
ROE (%) 33.4 30.4 28.1
Recommendation: BUY
Change in Estimates (%)
Financial Performance Y/E Mar FY26E FY27E
Sales -1.3% -0.5%
AIL reported revenue growth of 11.5% YoY in Q4FY25, slightly ahead of expectations of 8.3% EBITDA 2.2% 4.1%
YoY. Abbott’s growth of 11.5% outpaced the IPM's growth of 9.0%. An increase in secondary PAT 3.2% 5.3%
sales and a higher share of Duphalac, Udiliv, and Rybelsus, which reported QoQ growth of 20%,
Relative Performance:
19%, and 44%, respectively, contributed to the improved market share. The company reported
EBITDA margins of 26.7%, flat QoQ, but 380 bps expansion YoY, primarily due to lower COGS. 175
However, this was partially offset by Mixtard and Novomix, which recorded de-growth of 9.4%
125
and 2%, but still led to double-digit topline growth.
75
Growth in other key therapies, such as Cardiac (+7.8% QoQ) and Gastro (+14.5% QoQ), was
above IPM growth. The company’s 35% Anti-diabetic segment grew by 5%, while the rest of the 25
Nov-23 Mar-24 Aug-24 Dec-24 May-25
portfolio grew by around 15%, outpacing IPM.
Abbott India Ltd. BSE Sensex
The company’s gross margins expanded by 200 bps QoQ and 270 bps YoY, attributed to changes
in stock adjustments. The company also reported PAT of Rs 367 Cr, marking a 28% YoY growth, Source: Ace Equity
driven by high operating profitability.

Key Financials (Consolidated)

(Rs Cr) Q4FY25 QoQ (%) YoY (%) Axis Est. Variance %
Net Sales 1,605 -0.6% 11.5% 1,561 2.8%
EBITDA 429 -1.7% 12.5% 404 6.1%
EBITDA Margin 26.7% -31 380 25.9% - Ankush Mahajan
Research Analyst
Net Profit 367 1.7% 27.9% 329 11.6%
Email: [email protected]
EPS (Rs) 172.7 1.7% 27.9% 154.8 11.6%
Source: Company, Axis Securities Research Aman Goyal
Research Associate
Email: [email protected]

1
Outlook
Abbott India’s 'Beyond the Pill’ strategy, which encompasses consumer education, diagnosis, treatment, and compliance, is expected to
drive continued growth. The company is growing 1.2 to 1.5 times faster than the IPM, driven by its strong brand recognition and excellent
product portfolio.

Valuation & Recommendation

Based on Abbott India's ability to outpace the IPM and leverage its better product mix with new launches, we maintain a BUY rating on the
stock. We have set a target price of Rs 33,400/share, which implies an upside potential of 10% from the CMP. This valuation is based on
a multiple of 42x PE for H1FY27E.

Healthy cash flow generation strengthens the balance sheet

In FY25, Abbott India Ltd. (AIL) generated a robust cash flow of ~Rs 1,970 Cr, increasing its cash reserves to Rs 1,628 Cr by the end of
FY25. The company's branded business is anticipated to enhance overall profitability. AIL is well-positioned for continued financial stability
and growth with a strong Free Cash Flow to Firm (FCFF) to EBITDA ratio of 65%, high return ratios, and substantial dividend payouts.

Key Risks to Our Estimates and TP

• The launch of similar molecules in the same therapies may impact revenue growth

• Entry of more products into NELM may impact its profitability.

• An increase in royalties for parents may impact the company's profitability.

Change in Estimates
New Old Change (%)

FY26E FY27E FY26E FY27E FY26E FY27E

Sales 7,308 8,090 7,403 8,130 -1.3% -0.5%

EBITDA 1,951 2,192 1,910 2,106 2.2% 4.1%

PAT 1,546 1,720 1,499 1,634 3.2% 5.3%

Source: Company, Axis Securities Research

2
Results Review
Particulars (Rs Cr) Q4FY24 Q1FY25 Q2FY25 Q3FY25 Q4FY25 YoY (%) QoQ (%)
Net Sales 1,439 1,558 1,633 1,614 1,605 11.5 -0.6
Growth (%) 7.1% 5.3% 9.3% 12.3% 11.5%
Total Expenditure 1,109 1,167 1,194 1,178 1,176 6.0 -0.2
Raw Material Consumed 162 146 172 116 187
Stock Adjustment 747 781 738 749 787
Development Costs -103 -81 -9 27 -118
% of sales 56.0% 54.3% 55.2% 55.3% 53.3%
Gross Margins (%) 44.0% 45.7% 44.8% 44.7% 46.7% 267 196
Employee Expenses 145 161 147 135 144 -0.6 7.2
% of sales 10.1% 10.3% 9.0% 8.3% 9.0%
Other Expenses 158 159 145 151 176 11.2 16.5
% of sales 11.0% 10.2% 8.9% 9.3% 10.9%
EBITDA 330 391 439 436 429 12.5 -1.7
EBITDAM (%) 22.9% 25.1% 26.9% 27.0% 26.7% 380 -31
Interest 3 3 3 2 4
Depreciation 18 18 18 18 18
Other Income 81 67 60 72 76
PBT 390 437 479 488 483 23.9 -1.0
Tax 103 109 121 127 116
Tax (%) 26.3% 25.0% 25.2% 26.0% 24.0%
Reported PAT 287 328 359 361 367 27.9 1.7
Source: Company, Axis Securities Research

Therapy-wise breakup

Drug Therapy Value (Rs Cr) YoY (%)

Thyronorm Hormones 673 9.1%

Duphaston Gynaecological 380 -3%

Udiliv Gastrointestinal 658 17.3%

Mixtard Anti diabetic 803 -6%

Duphalac Gastrointestinal 369 19.6%

Source: IPM

3
Financials (Consolidated)
Profit & Loss (Rs Cr)
Particulars (Rs Cr) FY24 FY25 FY26E FY27E
Net Sales 5,849 6,409 7,308 8,090
Growth (%) 9.4% 9.6% 14.0% 10.7%
Total Expenditure 4,396 4,715 5,357 5,898
Raw Material Consumed 3,221 3,497 3,983 4,401
Gross margins (%) 44.9% 45.4% 45.5% 45.6%
Employee Expenses 577 588 672 728
% of sales 9.9% 9.2% 9.2% 9.0%
Other Expenses 599 630 702 769
% of sales 10.2% 9.8% 9.6% 9.5%
EBIDTA 1,453 1,695 1,951 2,192
EBITDAM (%) 24.8% 26.4% 26.7% 27.1%
Depreciation 71 72 100 116
EBIT 1,382 1,623 1,851 2,076
EBITM (%) 23.6% 25.3% 25.3% 25.7%
Interest 12 11 12 12
Other Income 248 276 250 260
PBT 1,618 1,887 2,089 2,324
Tax Rate (%) 25.7% 25.0% 26.0% 26.0%
Tax 417 473 543 604
Reported PAT 1,201 1,414 1,546 1,720
Source: Company, Axis Securities Research

Balance Sheet (Rs Cr)

Y/E Mar, Rs. Cr FY24 FY25 FY26E FY27E
Share Capital 21.3 21.3 21.3 21.3
Reserves & Surplus 3,678 4,212 5,067 6,097
Shareholders Fund 3,699 4,233 5,089 6,118
Total Loan 83 197 204 204
Trade Payables 1,003 1,058 1,241 1,352
Provisions 252 287 293 303
Other Liabilities 157 142 162 182
Total Liabilities 5,193 5,917 6,990 8,160
Gross Block 340 420 500 580
Depreciation 193 264 364 480
% of GB 56.7% 63.0% 72.9% 82.8%
Net Block 147 134 135 99
Fixed Assets 235 348 223 187
Deferred Tax Asset(Net) 0 0 0 0
Long-Term Loans & Advances 0 0 0 0
Other Non-Current Assets 1,713 805 2,002 2,216
Inventories 620 882 901 997
Trade Receivables 319 380 400 443
Cash & Cash Equivalents 2,134 1,628 1,578 2,421
Loans & Advances 0 0 0 0
Other Assets & Liabilities 1,885 2,680 3,887 4,111
Total Assets 5,193 5,917 6,990 8,160
Source: Company, Axis Securities Research

4
Cash Flow (Rs Cr)
Y/E Mar, Rs Cr FY24 FY25 FY26E FY27E
PBT 1,618 1,887 2,089 2,324
Add: Depreciation 71 72 100 116
Add: Interest 12 11 12 12
Cash flow from operations 1,701 1,970 2,201 2,452
Change in working capital 306 1,042 1,037 223
Taxes 417 473 543 604
Net cash from operations 979 456 621 1,625
Capital expenditure -95 -66 -94 -80
Net cash from investing -95 -66 -94 -80
Increase/Decrease in debt -30 113 8 0
Dividends -691 -691 -691 -691
Proceedings from equity 0 0 0 0
Others 46 -308 118 0
Net cash from financing -687 -896 -577 -703
Net Inc./(Dec.) in Cash 197 -507 -50 843
Opening cash balance 1,937 2,134 1,628 1,578
Closing cash balance 2,134 1,628 1,578 2,421
Source: Company, Axis Securities Research

Ratio Analysis (%)

Y/E March FY24 FY25E FY26E FY27E
Operational Ratios
Sales growth (% YoY) 9.4 9.6 14.0 10.7
EBITDA growth (% YoY) 20.5 16.6 15.2 12.4
Net Profit growth (% YoY) 26.5 17.7 9.3 11.2
EBITDA Margin % 24.8 26.4 26.7 27.1
Net profit Margin % 20.5 22.1 21.2 21.3
Tax Rate % 25.7 25.0 26.0 26.0
Efficiency Ratios
Total Asset Turnover (x) 1.1 1.1 1.0 1.0
Sales/Gross block (x) 17.2 15.3 14.6 14.0
Sales/Net block(x) 39.7 48.0 54.0 81.4
Working capital/Sales (x) -0.01 0.03 0.01 0.01
Valuation Ratios
PER (x) 53.6 45.6 41.7 37.5
P/BV (x) 17.4 15.2 12.7 10.5
EV/Ebitda (x) 42.9 37.2 32.3 28.4
EV/Sales (x) 10.7 9.8 8.6 7.7
Dividend Yield (%) 1.1 1.1 1.1 1.1
Return Ratios
ROE 32.5 33.4 30.4 28.1
ROIC 45.2 37.8 34.2 36.2
Source: Company, Axis Securities Research

5
 Abbott India Price Chart and Recommendation History

Date Reco TP Research

11-Aug-23 HOLD 25,000 Result Update

13-Nov-23 HOLD 25,000 Result Update

02-Feb-24 BUY 28,400 Result Update

10-May-24 BUY 28,000 Result Update

08-Aug-24 BUY 31,000 Result Update

08-Nov-24 BUY 31,420 Result Update

06-Feb-25 BUY 31,000 Result Update

16-May-25 BUY 33,400 Result Update

Source: Axis Securities Research

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 NEERAJ Digitally signed by NEERAJ
CHADAWAR

CHADAWAR Date: 2025.05.16 09:50:45

+05'30'

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RATING SCALE: Definitions of ratings

Ratings Expected absolute returns over 12 – 18 months

BUY More than 10%

HOLD Between 10% and -10%

SELL Less than -10%

NOT RATED We have forward looking estimates for the stock, but we refrain from assigning valuation and recommendation.

UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events

NO STANCE We do not have any forward-looking estimates, valuation or recommendation for the stock

Note: Returns stated in the rating scale are our internal benchmark.