1. At a Glance
Abbott India is the OG MNC pharma player that doesn’t chase headlines, but quietly compounds at double digits. With ROCE at 46%, zero debt, and 70%+ dividend payout, this is the HDFC Bank of pharma. Just don’t expect fireworks—this is more Sanjay Bakshi than Reddit trader.
2. WTF Do They Even Do?
Abbott India Ltd is the Indian subsidiary of Abbott Laboratories (USA) and handles:
🧪 Branded Generics (dominated by top brands like Thyronorm, Duphaston)
💊 Prescription Pharma in segments like:
- Gastro (antacids, PPIs)
- CNS
- Women’s Health
- Nutraceuticals
- Pediatric vaccines (PCV-14 just launched)
👉 It doesn’t manufacture everything itself; much is outsourced or co-developed globally.
3. Financials Overview – Not Fast, But Furious(ly Profitable)
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 4,310 | 4,913 | 5,349 | 5,849 | 6,409 |
| Net Profit (₹ Cr) | 691 | 799 | 949 | 1,201 | 1,414 |
| OPM (%) | 21% | 22% | 23% | 25% | 26% |
| ROCE (%) | 35% | 38% | 41% | 46% | 46% |
| ROE (%) | 32% | 34% | 36% | 36% | 35.7% |
🧠 TL;DR: Margin gains are real. This is one of India’s most capital-efficient pharma stocks.
4. Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹34,735
- P/E: 52.2x
- P/B: 17.4x
- EPS (FY25): ₹665
- Dividend Yield: 1.37%
🧮 Fair Value Range (EduCalc™):
- EPS CAGR (3Y): ~21%
- Apply 40–45x multiple (given premium MNC brand, ROCE >45%)
→ FV Range = ₹26,500 – ₹30,000
📉 CMP = Too Hot to Handle
5. What’s Cooking – Pipeline, Drama & News
- 💉 PCV-14 vaccine launched for kids (competing with Serum and Pfizer)
- 🔁 Management churn — MD & CFO exits in FY25, replaced in June 2025
- ⚖️ Customs dispute → ₹75 Cr demand (pending litigation)
- 🤝 Deal with Takeda for Vonoprazan (ulcer/GERD treatment)
- 📦 Supply chain localized post-COVID to reduce dependency on China
6. Balance Sheet – Stronger Than Protein-X
| Item | FY25 |
|---|---|
| Equity Capital | ₹21 Cr |
| Reserves | ₹4,212 Cr |
| Debt | ₹197 Cr |
| Assets | ₹5,917 Cr |
🔒 Almost debt-free, very little fixed assets (~₹336 Cr), rest is working capital + cash equivalents.
7. Cash Flow – Like a Swiss Watch
| Year | CFO | CFI | CFF | Comments |
|---|---|---|---|---|
| FY25 | ₹1,012 Cr | ₹182 Cr | -₹925 Cr | Massive payout, low capex |
| FY24 | ₹1,213 Cr | -₹416 Cr | -₹745 Cr | Cash rich, shareholder friendly |
| FY23 | ₹893 Cr | -₹148 Cr | -₹639 Cr | Steady free cash flow |
💵 FCF every year
🎁 Dividend payout >70% of earnings
🚫 No dilution, no funny capital raising
8. Ratios – Sexy, Certified, and Sustainable
| Ratio | FY25 |
|---|---|
| ROCE | 46.2% |
| ROE | 35.7% |
| OPM | 26% |
| Dividend Payout % | 71% |
| Working Capital Days | 101 😬 |
⚠️ Red flag: Working capital jump from -12 to +101 days → Inventory build-up?
9. P&L Breakdown – EPS Machine
- Revenue CAGR (5Y): ~9%
- Profit CAGR (5Y): ~19%
- Margins up from 18% to 26%
- EPS (FY21 → FY25): ₹325 → ₹665 = 2x in 5 years
🍀 Bonus: Other income of ₹276 Cr — treasury is working overtime.
10. Peer Comparison – Big Fish in a Bigger Pond
| Company | ROCE (%) | OPM (%) | P/E | EPS |
|---|---|---|---|---|
| Abbott India | 46.2 | 26% | 52.2x | ₹665 |
| Divi’s Labs | 20.4 | 31% | 83.6x | ₹82 |
| Sun Pharma | 20.1 | 29% | 35.1x | ₹48 |
| Cipla | 22.7 | 25.9% | 23.8x | ₹64 |
| Dr. Reddy’s | 22.7 | 26.2% | 19.7x | ₹67 |
👑 Best return ratios, but priced for zero mistakes
11. Misc – Shareholding, Liquidity, Insider Action
- 🏢 Promoter Holding: 74.99% (unchanged for years)
- 🏦 DII Ownership: 8.91% (steady accumulation)
- 👀 Retail: Just 15.9%
- 🔁 No pledging, no bulk deals
🫰 This is an MNC’s fortress — small float, tightly controlled.
12. KMP & Management – Musical Chairs
- ⚠️ 3 CFOs & 2 MDs quit in FY24-FY25 → worrying?
- 🧪 But operations remain rock solid — typical of Abbott global structure
- 🧍♀️ Maithilee Mistry (new CFO) brings strategic finance expertise
- 🎯 New MD Kartik Rajendran is ex-Nutrition & Asia region head
🙋♂️ More professional rotation than crisis — but worth tracking.
13. EduInvesting Verdict™
This is one of India’s finest compounders — clean, consistent, and ultra-efficient. But it’s trading at luxury valuations, like the Louis Vuitton of pharma.
✅ High margins
✅ Super ROCE/ROE
✅ Strong parentage
✅ Bulletproof cash flow
❌ High P/E
❌ Working capital jump
❌ Recent management churn
🩺 “If you want a stress-free SIP in Indian pharma — this is the prescription. Just be ready to pay MRP, always.”
✍️ Written by Prashant | 📅 6 July 2025
Tags: Abbott India, MNC Pharma Stocks, High ROCE Stocks, Premium Pharma Valuations, Dividend Compounders, Working Capital Issues, EduInvesting, Healthcare Stocks India
