Abbott India Q1 Results Review - Soft Quarter; Margin Profile Intact: ICICI Securities

ICICI Securities Report

Abbott India Ltd.’s Q1 FY25 revenue growth slowed down to ~5% on high base of last year (14.3% growth in Q1 FY24) and slowdown in Novo portfolio. Sequential jump of 168/220 basis points in gross/Ebitda margin was on account of price hikes, mix improvement and lower overhead cost.

MNC companies like Abbott take timely price hikes on their non- National List of Essential Medicine portfolio which along with operating leverage may drive margins hereon.

We remain positive on the company given its exclusive focus on domestic formulations, strong return profile (return on capital employed and return on equtiy of 35% in FY24) and a cash rich balance sheet (Rs 21.3 billion at FY24 end). We maintain our Buy rating on the stock with target price of Rs 32,500, based on 42 times FY26E EPS.

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