The company’s top 10 brands posted average annual revenue growth of 18 per cent over the FY15-20 period. The share of brands as a proportion of revenues has increased from 37 per cent in FY15 to 47 per cent in FY20.
Analysts at CLSA, while indicating that the lockdown-led disruption will impact growth, expect new launches and volume growth to drive sales for the company. In addition to new launches and extensions introduced by the company, the access to innovative molecules from the global parent is expected to push growth.
Despite the near-term hiccups, analysts at ICICI Direct believe Abbott India
will continue to generate investor interest with a robust and sustainable business model, backed by stable growth, a debt-free balance sheet and favourable market dynamics with doctor prescription stickiness. They expect the company to maintain its growth trajectory due to power brands and consistency of new launches. The company launched over 100 brands in 10 years.
While these are positives, the stock, which has gained 90 per cent over the last year, trades at an expensive 38 times its FY22 earnings estimates. Await a better entry opportunity.