Abbott India Limited (“Abbott” or the “Company”) is one of India’s fastest-growing pharmaceutical companies. The Company provides products across various therapeutic categories such as Women’s Health, Gastroenterology, Central Nervous System (CNS), Metabolics, General Care, Vitamins, Vaccines, etc.
Abbott India owns a portfolio of 110 brands and a manufacturing site at Goa and over 40 third party manufacturers.
The Company operates mainly in the Gastro-Intestinal (GI), Vitamins & Minerals, Neuro, Gynaecological and Hormones domain (~90% of domestic revenues as per AIOCD MAT Mar 2018).
Abbott India also distributes Novo Nordisk’s insulin products in India. Insulin comprise 40-45% of Abbott India’s business.
|
Business Divisions |
Brands |
|
Women’s Health & Gastrointestinal (WH & GI) |
Duphaston | Udiliv Cremaffin | Duphalac | Creon | Heptral |
|
Specialty Care (Metabolics and Central Nervous System) |
Thyronorm | Vertin Prothiaden |
|
GenNext and Vaccines |
Zolfresh | Influvac | Enteroshield | Brufen Arachitol Nano |
|
Consumer Care |
Digene | Citrosoda | Rashfree |
Financial Position
|
Particulars |
FY15 |
FY16 |
FY17 |
FY18 |
FY19 |
|||||
|
Revenue (In Rs. Cr.) |
2,288.65 |
2,614.50 |
2,902.56 |
3,298.50 |
3,678.60 |
|||||
|
Growth |
– |
14.24% |
11.02% |
13.64% |
11.52% |
|||||
|
EBITDA (In Rs. Cr.) |
312.26 |
364.38 |
397.32 |
524.50 |
604.74 |
|||||
|
EBITDA Margin |
13.64% |
13.94% |
13.69% |
15.90% |
16.44% |
|||||
|
EBIT (In Rs. Cr.) |
297.32 |
349.94 |
380.89 |
508.31 |
587.82 |
|||||
|
EBIT Margin |
12.99% |
13.38% |
13.12% |
15.41% |
15.98% |
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|
PBT (In Rs. Cr.) |
344.36 |
398.01 |
436.49 |
621.48 |
698.85 |
|||||
|
PAT (In Rs. Cr.) |
228.96 |
255.25 |
276.65 |
401.22 |
450.33 |
|||||
|
PAT Margin |
10.00% |
9.76% |
9.53% |
12.16% |
12.24% |
|||||
|
EPS (In Rs.) |
107.75 |
120.12 |
130.19 |
188.81 |
211.93 |
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|
EPS Growth Rate |
– |
11% |
8% |
45% |
12.2% |
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|
Historic P/E (Closing Price of 31st March) |
36.64 |
39.19 |
35.63 |
28.86 |
34.47 |
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|
CURRENT P/E (based on price of 4th October – Rs.11143.95) |
48.84 |
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|
Shareholder funds (In Rs. Cr.) |
937.53 |
1,195.60 |
1,386.94 |
1,692.76 |
2,008.59 |
|||||
|
Minority Interest (In Rs. Cr.) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|||||
|
Debt (In Rs. Cr.) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|||||
|
Cash (In Rs. Cr.) |
643.89 |
839.42 |
1,090.92 |
1,031.35 |
1,684.28 |
|||||
|
D/E |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|||||
|
Interest Coverage |
NA |
|||||||||
|
ROCE |
31.71% |
29.27% |
27.46% |
30.03% |
29.27% |
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|
ROE |
36.73% |
33.29% |
31.47% |
36.71% |
34.79% |
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Quarterly Performance
|
Quarterly Results |
Q1 FY 2019 |
Q2 FY 2019 |
Q3 FY 2019 |
Q4 FY 2019 |
Q1 FY 2020 |
TTM |
Q-o-Q % |
Y-o-Y % |
|
Revenue (In Rs. Cr.) |
844.92 |
979.72 |
947.65 |
906.31 |
998.89 |
3,832.57 |
10.22% |
18.22% |
|
EBITDA (In Rs. Cr.) |
111.35 |
194.01 |
146.49 |
152.90 |
174.18 |
667.58 |
13.92% |
56.43% |
|
EBITDA Margin |
13.18% |
19.80% |
15.46% |
16.87% |
17.44% |
17.42% |
|
|
|
PAT (In Rs. Cr.) |
82.40 |
137.68 |
117.05 |
113.19 |
116.94 |
484.86 |
3.31% |
41.92% |
|
PAT Margin |
9.75% |
14.05% |
12.35% |
12.49% |
11.71% |
12.65% |
|
|
|
EPS (Rs.) |
38.78 |
64.79 |
55.08 |
53.28 |
55.03 |
228.18 |
3.28% |
41.90% |
WHAT’S DRIVING THE STOCK?
Market Leader in Most of the Categories – Abbott India’s top 10 brands together recorded revenue CAGR of 17%. The Company’s top 10 brands are leaders (at number 1 or 2 positions) in their respective segments. The Company is a leading player in the thyroid segment and has over 50% market share through its flagship brand Thyronorm which has grown by 60% despite under price control.
Abbott India’s other major brand Duphaston for gynecological usage is performing well and has grown by 31%. The Company currently markets over 110 brands in India and is present in metros and Tier I and Tier II cities and has no plans to enter the rural market.
Power Brands Performance
|
Particulars |
FY15 |
FY16 |
FY17 |
FY18 |
FY19 |
CAGR |
|
Duphaston (Women’s health) |
163.60 |
164.70 |
210.60 |
262.00 |
358.90 |
21.7% |
|
Thyronorm (Metabolic) |
152.10 |
179.00 |
194.00 |
260.80 |
342.20 |
22.5% |
|
Udiliv (GI) |
111.50 |
118.30 |
161.20 |
191.70 |
237.60 |
20.8% |
|
Cremaffin (GI) |
97.10 |
122.50 |
145.20 |
161.30 |
182.50 |
17.1% |
|
Vertin (CNS) |
93.60 |
126.10 |
135.50 |
149.80 |
166.50 |
15.5% |
|
Total |
617.90 |
710.60 |
846.60 |
1,025.60 |
1,287.70 |
20.1% |
|
% of total Sales |
26% |
26% |
28% |
30% |
34% |
|
New Product Launches – The Company continues to launch new products in various categories to expand its portfolio. In FY 2019, the Company launched 16 new products / product extensions. Abbott India plans to launch 100+ products over next five years which is expected to provide further growth opportunities. The management also indicated to enter new therapy areas like Menopause and liver disease, etc to tap unmet needs.
Strong Balance Sheet, Debt-Free Cash Rich Company – A debt-free company. Continued new product launches, volume led growth in Abbott India’s top brands and intermittent price hikes in its portfolio provide comfort on return ratios that are healthy. The Company has low capex as most of its products are made by third-party manufacturers.
The Company has maintained dividend payout in the range of 30% in the past four years with Rs. 793 in FY19.
WHAT’S DRAGGING THE STOCK?
Competitive Landscape
24% of Abbott India’s portfolio falls under the National List of Essential Medicines (NLEM).
Threat from government schemes like Janaushadhi scheme, under which the government provides quality medicines at affordable rates. The generic medicines provided by the Janaushadhi stores are almost 50 to 90% cheaper.