Abbott India - Q4 FY20 Result Analysis
A company with very good growth history, Debt free combined with high return on Equity spot the multi-bagger. Many of you are holding this stock since 1800 and even when pharma was falling Abbott has performed well. Company able to grow sales from 300 cr to 3800 cr while profits from 50 cr to 500 cr during the last 2 decades. Growth of 10X gave Investment of 1 Lakh done 2 decades back today’s valuation to 50 Lakh along with 3x investment refunded in dividends.
Total revenue from operations 961.2 Cr
906.3 Cr (6.05%) YoY | 1,078 Cr (-10.85%) QoQ
Year ending revenue: 4,093 Cr Vs. 3,678 Cr (11.24%)
Net Profit of 110.9 Cr
113.1 Cr (-1.92%) YoY 186.6 Cr (-40.89%) QoQ
Year ending Net profit: 592.9 Cr Vs. 450.3 Cr (-31.51%)
EPS (in Rs.) 52.22
53.28 YoY | 87.85 QoQ
Year ending EPS: 279.04 Vs. 211.93
View: Result is below expectation. YoY revenue increased but profit decreased and EBITDA also declined in this quarter.
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 138.5 Cr Vs. 152.8 Cr in FY19 Vs. 239.7 Cr in Q3FY20 therefore declined by 9.2% in YoY and declined by 42.2% in QoQ. EBITDA margin in Q4FY20 is 14.4% Vs. 16.9% in Q4FY19 Vs. 22.2% in QoQ.
FY20 EBITDA is INR 756.4 Cr Vs. 604.8 Cr in FY19 therefore up by 25.1% in YoY. EBITDA margin is 18.4% Vs. 16.4% in YoY.
Board of Directors at its Meeting held on June 8, 2020, recommended payment of final dividend of Rs 107/- and special dividend of Rs 143/- per equity share of Rs 10/- each for the year ended March 31, 2020, subject to approval of the Shareholders at the ensuing Annual General Meeting scheduled to be held on September 7, 2020 Book closure date is Sep 1, 2020 to Sep 7, 2020 (both days inclusive).
Financial
ROE and ROCE is around INR 24% and 38% respectively and book value per share is around INR 1,004 and share is currently trading at 16.5x of its book value. Company is currently trading at annualized PE of around 60 which is high as per industry benchmark. Promoter holding is around 75% in the company which is very fair and stable. FIIs and mutual fund hold around 4.8% and 1.6% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 626.1 Cr Vs. 499.1 Cr as of March 2019. The good thing is company is virtually debt free.
Position: Share strong support price is INR 16,200/15,600. Long term investor should continue with the company.
Share View
Share price high 18,569 (52 week) and now 16,600. Abbott India Limited is part of Abbott's global pharmaceutical business in India. Abbott in India develops and distributes over 600 products for healthcare professionals that promote health and well-being for Indians in all stages of life. Abbott India Limited is a healthcare company engaged in pharmaceuticals business. Its business operations are divided into four business divisions: Women's Health & Gastrointestine, Gastroenterology and Hepatic Care; Specialty Care; GenNext & Vaccines, and Consumer Care.
Share price high 18,569 (52 week) and now 16,600. Abbott India Limited is part of Abbott's global pharmaceutical business in India. Abbott in India develops and distributes over 600 products for healthcare professionals that promote health and well-being for Indians in all stages of life. Abbott India Limited is a healthcare company engaged in pharmaceuticals business. Its business operations are divided into four business divisions: Women's Health & Gastrointestine, Gastroenterology and Hepatic Care; Specialty Care; GenNext & Vaccines, and Consumer Care.
Opportunities
Share has continuously outperformed and more than double in less than 1 year. Recently as per the report the US FDA issued an emergency use authorization for the company’s coronavirus blood test. Abbott now plans to ship nearly 30 Mn antibody test globally with capacity to be delivered. Abbott is a leader in providing antibody testing at large scale on multiple systems, which is helping meet the needs of laboratories as they look to build the capacity. Strong corporate governance model as generally MNC follow. Good dividend pay to their shareholders as well.
Share has continuously outperformed and more than double in less than 1 year. Recently as per the report the US FDA issued an emergency use authorization for the company’s coronavirus blood test. Abbott now plans to ship nearly 30 Mn antibody test globally with capacity to be delivered. Abbott is a leader in providing antibody testing at large scale on multiple systems, which is helping meet the needs of laboratories as they look to build the capacity. Strong corporate governance model as generally MNC follow. Good dividend pay to their shareholders as well.
Risk
The stock is the costliest among as compare to Sanofi, Pfizer, GSK etc. EBITDA is also declined and top line was also single digit in this quarter.
The stock is the costliest among as compare to Sanofi, Pfizer, GSK etc. EBITDA is also declined and top line was also single digit in this quarter.
Sources:
Various publications
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