Sharekhan Bets On This Bluechip Pharma Stock For Gains Up To 24%, Reports Double-Digit Revenue

Sharekhan has given buy call to the bluechip pharmaceuticals stock Abbott India Ltd for a target price Rs 22,780 with a potential gain of 23.57%. The company reported double-digit revenue as well as strong earnings growth during these challenging times backed by agile business model leading to minimal disruptions.

Abbott India Ltd Stock Outlook

The current market price of Abbott India Ltd is Rs 18,211 apiece with a decline of 1.34% intraday. The stock's 52-week high is Rs 23,902 apiece and 52-week low is Rs 15,525 apiece. According to Sharekhan, if you buy the stock at its current market price, it has the potential to surge to Rs 22,780 apiece.

Abbott India Ltd 5 Years Return

The stock has given a return of 329% in last 5 years, 91% return in last 3 years, and fallen 8% in the last 1 year.

Abbott India Ltd Market Capitalization

The stock has a market capitalization of Rs 38,698.80 crore.

Abbott India Ltd IPM to report close to double-digit growth for 2022

Management sees IPM to grow inn high single digit of 9.5%. Growth is expected to be driven by improved access to healthcare, increase awareness and diagnosis of non-communicable diseases, new product launches, and expansion of the hospital infrastructure. In addition, new co-marketing agreements and expansion of pharmacy chains/online models would drive IPM's growth. Price hikes would add to IPM's growth.

Abbott identifies critical areas to strengthen its business model and foster customer relations

Backed by management's determination to achieve market beating growth and continue market share gains, Abbott has identified critical areas for focus, which provide opportunities to improvise its business model and fortify customer relations. Some of the key areas include increasing portfolio depth/expansion of the product portfolio, tapping different channels, and leveraging digital channels to improve access.

Presence across therapy areas with a leadership position bodes well

Abbott's key brands include Duphaston, Thyronorm, Duphalac, and Udiliv. The company has outperformed the market and maintained its leadership in these brands. Further, in the past three years, over 52 products were launched, including line extensions.

Valuation

According to Sharekhan, "Abbott has mentioned about double-digit growth in FY22 despite challenges posed by the pandemic, backed by an evolving business model, which led to minimal disruptions. Moreover, the company has identified critical focus areas, which would further strengthen its business model and foster customer relations, which could drive growth ahead. Abbott's revenue and earnings are expected to stage a strong 11% and 14% CAGR over FY2022-FY2024E. Close to double-digit growth in IPM is expected to sustain going ahead, driven by multiple growth drivers as well as a sizeable contribution from acute therapies. This coupled with increasing geographic penetration and strong performance of its top brands are key growth drivers for Abbott. At the CMP, the stock trades at 43.3x /37.6x its FY2023E/FY2024E, respectively. Healthy growth prospects, a strong, debt-free balance sheet, and strong dividend payout are key positives. Based on this, we retain Buy on the stock with an unchanged price target (PT) of Rs. 22,780."

About Abbott

Established in 1910, Abbott in India is one of the country's oldest and most admired healthcare companies. It provides consumers with a diverse range of diagnostics solutions, medical devices, nutritional products and established pharmaceuticals that span the continuum of care.

Disclaimer

The above stock was picked from the brokerage report of Sharekhan. 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.