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Outlook and Conclusion
At the current market price of Rs.1600.00, the stock P/E ratio is at 22.85 x CY12E and 19.50 x CY13E
respectively.
Earning per share (EPS) of the company for the earnings for CY12E and CY13E is seen at Rs.70.01 and
Rs.82.05 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2010 to 2013E
respectively.
On the basis of EV/EBITDA, the stock trades at 12.76 x for CY12E and 10.81 x for CY13E.
Price to Book Value of the stock is expected to be at 4.91 x and 3.92 x respectively for CY12E and CY13E.
Abbott India has signed an agreement to collaborate with Astellas Pharma Global Development in a Phase 3
clinical trial for ASP0113 (TransVax™), an investigational vaccine licensed from Vical Incorporated for
preventing cytomegalovirus (CMV) reactivation in transplant patients.
The first quarter witness a healthy increase in overall sales as well as profitability on account of powerful
combination of exciting products, improved efficiencies across a number of operating divisions and the effect of
foreign exchange. We expect that the company surplus scenario is likely to continue for the next three years, will
keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target
price of Rs.1808.00 for Medium to Long term investment.
Industry Overview
India's pharmaceutical sector is gaining its position as a global leader. The pharma market in India is expected to
touch US$ 74 billion in sales by 2020 from the current US$ 11 billion, according to a PricewaterhouseCoopers
(PwC) report.
Growth of Indian pharma companies will be driven by the fastest growing molecules in the diabetes, skincare and
eye care segment, as per a report by research firm, Credit Suisse. The market share of a drug company is directly
related to the number of fast growing molecules in the company's pipeline, the report highlighted.
The Indian pharmaceutical market is poised to grow to US$ 55 billion by 2020 from the 2009 levels of US$ 12.6
billion, as per a McKinsey & Company report titled "India Pharma 2020: Propelling access and acceptance
realizing true potential". The industry further holds potential to reach US$ 70 billion, at a compound annual
growth rate (CAGR) of 17 per cent.
Outlook and Conclusion
At the current market price of Rs.1600.00, the stock P/E ratio is at 22.85 x CY12E and 19.50 x CY13E
respectively.
Earning per share (EPS) of the company for the earnings for CY12E and CY13E is seen at Rs.70.01 and
Rs.82.05 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2010 to 2013E
respectively.
On the basis of EV/EBITDA, the stock trades at 12.76 x for CY12E and 10.81 x for CY13E.
Price to Book Value of the stock is expected to be at 4.91 x and 3.92 x respectively for CY12E and CY13E.
Abbott India has signed an agreement to collaborate with Astellas Pharma Global Development in a Phase 3
clinical trial for ASP0113 (TransVax™), an investigational vaccine licensed from Vical Incorporated for
preventing cytomegalovirus (CMV) reactivation in transplant patients.
The first quarter witness a healthy increase in overall sales as well as profitability on account of powerful
combination of exciting products, improved efficiencies across a number of operating divisions and the effect of
foreign exchange. We expect that the company surplus scenario is likely to continue for the next three years, will
keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target
price of Rs.1808.00 for Medium to Long term investment.
Industry Overview
India's pharmaceutical sector is gaining its position as a global leader. The pharma market in India is expected to
touch US$ 74 billion in sales by 2020 from the current US$ 11 billion, according to a PricewaterhouseCoopers
(PwC) report.
Growth of Indian pharma companies will be driven by the fastest growing molecules in the diabetes, skincare and
eye care segment, as per a report by research firm, Credit Suisse. The market share of a drug company is directly
related to the number of fast growing molecules in the company's pipeline, the report highlighted.
The Indian pharmaceutical market is poised to grow to US$ 55 billion by 2020 from the 2009 levels of US$ 12.6
billion, as per a McKinsey & Company report titled "India Pharma 2020: Propelling access and acceptance
realizing true potential". The industry further holds potential to reach US$ 70 billion, at a compound annual
growth rate (CAGR) of 17 per cent.
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