Rs 410/ Sh Dividend, Highest 2024 Payout Soon: Axis Sec Advises BUY On Midcap Pharma Stock, Rs 28,500 TP

Midcap pharma stock, Abbott India's share price plunged on Monday after its Q4 results. However, this brings on a buy-on-dips opportunity in the stock as brokerage Axis Securities has recommended BUY on the stock for a target price of Rs 28,500. The company will pay the highest dividend of 2024 to Rs 410 per share and the record date is fixed for the same.

Currently, Abbott's share price is at Rs 26,250 apiece with a market cap of Rs 55,779.42 crore. The stock was at Rs 26,369.90 apiece in the previous session.

In its latest research note, Axis Securities said, "Abbott India's 'Beyond the Pill' strategy, which includes consumer education, diagnosis, treatment, and compliance, is expected to lead to continued growth. Abbott India is growing 1.6 to 1.8 times faster than IPM on account of high brand recognition and an excellent product portfolio."

The brokerage recommends BUY for a target price of Rs 28,500 per share ahead. This is higher than its earlier target of Rs 28,400.

Key rationale for recommendation as per Axis Securities are:

- AIL reported revenue growth of 7.1% YoY and outpaced the IPM's growth of 6% in Q4FY24. While Chronic growth halved to 6%, the Acute therapy segment continued its muted performance in the last quarter. The company achieved higher sales growth on account of a change in product mix, and a higher share of the antidiabetics, vitamins, and Hormones which reported YoY growth of 8.3%, 10.8% and 13.3% respectively. However, this was partially offset by Mixtard and Novomix, which recorded -0.4% growth and 10.8% de-growth YoY leading to high single-digit topline growth.

- In addition, growth in other key therapies such as Anti-infective (+3.5% YoY) and CNS (+1.4% YoY) was below IPM growth. Duphaston (gynaecology) sales stabilised at Rs 395 Cr (Source: AIOCD) in Q4FY24, registering a growth of 4.2% YoY.

- The company's gross margins improved by 57bps YoY due to changes in product mix (higher share of Hormones and Vitamins) and a fall in raw material prices. It reported the EBITDA margins at 22.9%, up 202bps YoY due to an improvement in gross profits and a fall in other expenses. The company also reported PAT of Rs 287 Cr, recording 24% YoY growth due to high operating profitability.

Abbott India Earnings:

The pharma player posted a net profit of Rs 287.06 crore in Q4FY24, which was up from Rs 231.42 crore posted in Q4FY23, but lower from Rs 310.98 crore in Q3FY24. Also, its revenue from operations stood at Rs 1,438.63 crore, higher from Rs 1,343.08 crore in Q4FY23, while marginally up from Rs 1,437.14 crore in Q3FY24.

FY24 net profit was at Rs 1,201.22 crore versus Rs 949.41 crore in FY23. Revenue stood at Rs 6,097.18 crore in FY24 as against Rs 5,502.88 crore in FY23.

Abbott India Dividend:

The company has announced payment of a final dividend of Rs. 410/- per equity share of Rs 10/- each for the year ended March 31, 2024, subject to the approval of the Shareholders at the ensuing Eightieth Annual General Meeting of the Company scheduled to be held on August 8, 2024.

The record date is fixed on Friday, July 19, 2024, as the Record Date for determining the entitlement of Members to the Final Dividend for the financial year ending March 31, 2024.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.