1. Recommendation BUY
CMP 3913.00
Target Price 4305.00
ISIN: INE358A01014 JULY 6th
2015
ABBOTT INDIA LTD
Result Update (PARENT BASIS): Q4 FY15
STOCK DETAILS
Sector Pharmaceuticals
BSE Code 500488
Face Value 10.00
52wk. High / Low (Rs.) 4444.05/2031.05
Volume (2wk. Avg ) 300
Market Cap ( Rs in mn ) 83151.25
Annual Estimated Results (A*: Actual / E*: Estimated)
Years FY15A FY16E FY17E
Net Sales 22886.40 24946.18 26941.87
EBITDA 3598.00 3887.20 4156.40
Net Profit 2289.60 2461.74 2659.58
EPS 107.75 115.85 125.16
P/E 36.32 33.78 31.26
Shareholding Pattern (%)
1 Year Comparative Graph
ABBOTT INDIA LTD S&P BSE SENSEX
Highlights
Abbott India Limited is one of India's fastest
growing pharmaceutical companies and part of
Abbott's Global Pharmaceutical business in India.
Net Sales of the company rose by 21.66% from Rs.
4937.50 mn in 31 March 2014 to Rs. 6007.10 mn
in the current March quarter.
During the quarter ended 31 March, 2015, Net
profit rose by 29.58% to Rs. 497.60 mn from Rs.
384.00 mn in 31 March, 2014.
EBIDTA also rose by 36.42% from Rs. 597.00 mn
to Rs. 814.40 mn in 31 March, 2015.
EBIDTA and Net profit margins are increased by
13.56% and 8.28%, respectively. Other income
stood at Rs. 135.30 mn in current March quarter.
During the quarter, PBT was up by 38.05% to Rs.
776.00 mn from Rs. 562.10 mn in previous quarter
ended 31 March, 2014.
EPS of the company stood at Rs.23.42 a share
during the quarter, registering 29.58% increased
over corresponding quarter previous year.
Abbott India Ltd has recommended a final
Dividend of Rs. 31 per equity share of Rs. 10/- each
for the year ended 31 March, 2015.
Net Sales and PAT of the company are expected to
grow at a CAGR of 13% and 16% over next three
years respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
COMPANY NAME (Rs.) Rs. Mn. (Rs.) Ratio Ratio (%)
Abbott India Ltd 3913.00 83151.25 107.75 36.32 8.87 310.00
Novartis India Ltd 772.00 24673.70 24.75 31.19 2.46 200.00
GlaxoSmithKline Pharmaceuticals Ltd 3344.00 283246.90 44.29 75.50 11.38 625.00
Cadila Healthcare Ltd 1837.50 376225.40 62.08 29.60 7.68 240.00

2. QUARTERLY HIGHLIGHTS
Net Sales of the company rose by 21.66% from Rs.
4937.50 mn to Rs. 6007.10 mn in the current march
quarter. Net profit rose by 29.58% to Rs. 497.60 mn
from Rs. 384.00 mn in 31 March, 2014. EBIDTA also
rose by 36.42% from Rs. 597.00 mn to Rs. 814.40
mn. EBIDTA and Net profit margins are increased by
13.56% and 8.28%, respectively. Other income stood
at Rs. 135.30 mn in current March quarter.
Break up of Expenditure:
Company Profile
Abbott India Limited is one of India's fastest growing pharmaceutical companies and part of Abbott's Global
Pharmaceutical business in India. Headquartered in Mumbai, Abbott India Limited, a publicly listed company and
a subsidiary of Abbott Laboratories, enjoys strong brand equity in multiple therapeutic categories such as
Women's Health, Gastroenterology, Neurology, Thyroid, Diabetes & Urology, Pain Management, Vitamins, Anti-
Infectives & other therapy areas. Abbott India Limited's success is driven by a combination of a highly competent
and motivated commercial team, R&D backed products, aided by strong alliances and partnerships. The company
has a state-of-the-art formulation plant at Verna, Goa. The manufacturing plant is designed to produce high
quality, high volume formulations using cost efficient processes and has well equipped laboratories and trained
personnel to ensure compliance with international quality standards. The company has in-house development
and medical teams to undertake product and clinical development tailored to needs of the Indian market. Abbott
India Limited believes in providing quality healthcare through a mix of global and local products which directly
affect the life of the common Indian.
Months Mar-15 Mar-14 % Change
Net Sales 6007.10 4937.50 21.66
Net Profit 497.60 384.00 29.58
Net Profit Margin 8.28% 7.78% 50BP
EBITDA 814.40 597.00 36.42
EBIDTA Margin 13.56% 12.09% 147BP
Other Income 135.30 93.90 44.09
Rs. In Million Mar-15 Mar-14 CHNG %
Cost of Material 868.40 595.20 46%
Employee Benefit Exp 767.20 684.90 12%
Dep. & Amortization 33.80 34.80 -3%
Other Exp 1081.40 955.60 13%
Purchase of Stock-in-Trade 2282.60 1706.80 34%

3. FINANCIAL STATEMENTS & ESTIMATIONS (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as on March 31, 2014 to March 31, 2017E
Abbott India Ltd. As at Mar’14 As at Mar’15 As at Mar’16E As at Mar’17E
SOURCES OF FUNDS
Shareholder's Funds
• Share Capital 212.50 212.50 212.50 212.50
• Reserves and Surplus 7666.02 9162.80 10812.10 12542.04
Sub Total - Net worth (a) 7878.52 9375.30 11024.60 12754.54
Non Current Liabilities
• Long term Provisions 573.44 391.60 368.10 379.15
Sub Total - Non Current liabilities (b) 573.44 391.60 368.10 379.15
Current Liabilities
• Trade payables 1362.20 1935.60 2187.23 2405.95
• Other Current liabilities 1038.66 1440.30 1555.52 1648.86
• Short term Provisions 539.09 593.50 635.05 673.15
Sub Total - Current Liabilities (c) 2939.95 3969.40 4377.80 4727.95
Total Liabilities (a + b + c) 11391.91 13736.30 15770.51 17861.64
APPLICATION OF FUNDS
Non-Current Assets
• Fixed Assets 995.24 999.50 1049.48 1091.45
• Deferred Tax Asset 12.76 65.30 75.10 85.61
• Long Term loans and advances 334.69 388.00 442.32 486.55
• Other non-current assets 20.19 22.40 24.64 27.10
Sub Total - Non Current Assets (d) 1362.88 1475.20 1591.53 1690.72
Current Assets
• Inventories 3655.09 3841.30 4071.78 4275.37
• Trade receivables 1091.75 1291.50 1498.14 1707.88
• Cash and Bank Balances 4628.42 6438.90 7839.47 9343.36
• Short-terms loans & advances 590.84 528.70 581.57 628.10
• Other current assets 62.93 160.70 188.02 216.22
Sub Total - Current Assets (e) 10029.03 12261.10 14178.98 16170.92
Total Assets (d+e) 11391.91 13736.30 15770.51 17861.64

4. Annual Profit & Loss Statement for the period of FY2014 to FY2017E
Value(Rs.in.mn) FY-14A FY-15A FY-16E FY-17E
Description 15m 12m 12m 12m
Net Sales 22968.90 22886.40 24946.18 26941.87
Other Income 482.20 475.50 494.52 519.25
Total Income 23451.10 23361.90 25440.70 27461.12
Expenditure -20285.50 -19763.90 -21553.50 -23304.72
Operating Profit 3165.60 3598.00 3887.20 4156.40
Interest -0.80 -5.00 -4.40 -3.96
Gross profit 3164.80 3593.00 3882.80 4152.44
Depreciation -219.30 -149.40 -161.35 -171.03
Profit Before Tax 2945.50 3443.60 3721.45 3981.41
Tax -961.00 -1154.00 -1259.71 -1321.83
Profit After Tax 1984.50 2289.60 2461.74 2659.58
Equity capital 212.50 212.50 212.50 212.50
Reserves 7666.02 9162.80 10812.10 12542.04
Face value 10.00 10.00 10.00 10.00
EPS 93.39 107.75 115.85 125.16
Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th June, 2015E
Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 5887.10 5735.40 6007.10 6307.46
Other income 122.10 126.00 135.30 127.18
Total Income 6009.20 5861.40 6142.40 6434.64
Expenditure -5007.00 -4876.90 -5328.00 -5487.49
Operating profit 1002.20 984.50 814.40 947.15
Interest -0.10 -0.20 -4.60 -2.85
Gross profit 1002.10 984.30 809.80 944.30
Depreciation -44.30 -36.40 -33.80 -36.50
Profit Before Tax 957.80 947.90 776.00 907.80
Tax -320.40 -302.60 -278.40 -306.38
Profit After Tax 637.40 645.30 497.60 601.41
Equity capital 212.50 212.50 212.50 212.50
Face value 10.00 10.00 10.00 10.00
EPS 30.00 30.37 23.42 28.30

5. Ratio Analysis
Particulars FY-14A FY-15A FY-16E FY-17E
EPS (Rs.) 93.39 107.75 115.85 125.16
EBITDA Margin (%) 13.78% 15.72% 15.58% 15.43%
PBT Margin (%) 12.82% 15.05% 14.92% 14.78%
PAT Margin (%) 8.64% 10.00% 9.87% 9.87%
P/E Ratio (x) 41.90 36.32 33.78 31.26
ROE (%) 25.19% 24.42% 22.33% 20.85%
ROCE (%) 42.96% 39.97% 36.72% 33.93%
EV/EBITDA (x) 24.81 21.32 19.37 17.76
Book Value (Rs.) 370.75 441.19 518.80 600.21
P/BV 10.55 8.87 7.54 6.52
Charts

6. Outlook and Conclusion
At the current market price of Rs.3913.00, the stock P/E ratio is at 33.78 x FY16E and 31.26 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.115.85 and Rs.
125.16 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 16% over next three years
respectively.
On the basis of EV/EBITDA, the stock trades at 19.37 x for FY16E and 17.76 x for FY17E.
Price to Book Value of the stock is expected to be at 7.54 x and 6.52 x for FY16E and FY17E respectively.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.4305.00 for Medium to Long term
investment.
Industry Overview
The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value, as
per a pharmaceuticals sector analysis report by equity master. The market is dominated majorly by branded
generics which constitute nearly 70 to 80 per cent of the market. Considered to be a highly fragmented industry,
consolidation has increasingly become an important feature of the Indian pharmaceutical market.
India has achieved an eminent global position in pharma sector. The country also has a huge pool of scientists
and engineers who have the potential to take the industry to a very high level.
Market Size
The Indian pharmaceutical industry is estimated to grow at 20 per cent compound annual growth rate (CAGR)
over the next five years, as per India Ratings, a Fitch Group company. Indian pharmaceutical manufacturing
facilities registered with US Food and Drug Administration (FDA) as on March 2014 was the highest at 523 for
any country outside the US.
Investments
The Union Cabinet has given its approval to amend the existing FDI policy in the pharmaceutical sector in order
to cover medical devices. The Cabinet has allowed FDI up to 100 per cent under the automatic route for
manufacturing of medical devices subject to specified conditions.

7. The drugs and pharmaceuticals sector attracted cumulative foreign direct investment (FDI) inflows worth US$
12,813.02 million between April 2000 and December 2014, according to data released by the Department of
Industrial Policy and Promotion (DIPP).
Some of the major investments in the Indian pharmaceutical sector are as follows:
• Stelis Biopharma has announced the ground-breaking for construction of its customised, multi-product,
biopharmaceutical manufacturing facility at Bio-Xcell Biotechnology Park in Nusajaya, Johor, Malaysia's
park and ecosystem for industrial and healthcare biotechnology at a total project investment amount of
US$ 60 million.
• Strides Arcolab has entered into a licensing agreement with US-based Gilead Sciences Inc to manufacture
and distribute the latter's low-cost Tenofovir Alafenamide (TAF) product used for HIV treatment in
developing countries. The licence to manufacture Gilead's low-cost drug extends to 112 countries.
• Cadila Healthcare Ltd has announced the launch of a biosimilar for Adalimumab - the world’s largest
selling drug for rheumatoid arthritis and other auto immune disorders.
• Torrent Pharmaceuticals has entered into an exclusive licensing agreement with Reliance Life Sciences
for marketing three biosimilars in India — Rituximab, Adalimumab and Cetuximab.
• Piramal Enterprises Ltd has acquired US-based Coldstream Laboratories for US$ 30.6 million in an all-
cash transaction.
• Indian Immunologicals Ltd (IIL) plans to set up a new vaccine manufacturing facility in Pondicherry with
an investment of Rs 300 crore (US$ 48.53 million).
• SRF Ltd has acquired Global DuPont Dymel, the pharmaceutical propellant business of DuPont, for US$ 20
million.
Government Initiatives
The Government of India has unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-to-end
drug manufacture. It has reduced approval time for new facilities to boost investments. Further, the government
has also put in place mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing
Authority to address the issue of affordability and availability of medicines.
Road Ahead
The Indian pharma market size is expected to grow to US$ 85 billion by 2020. The growth in Indian domestic
market will be on back of increasing consumer spending, rapid urbanisation, raising healthcare insurance and so
on.

8. Going forward, better growth in domestic sales will depend on the ability of companies to align their product
portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants
and anti-cancers are on the rise.
Moreover, the government has been taking several cost effective measures in order to bring down healthcare
expenses. Thus, governments are focusing on speedy introduction of generic drugs into the market. This too will
benefit Indian pharma companies. In addition, the thrust on rural health programmes, life saving drugs and
preventive vaccines also augurs well for the pharma companies.
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