Home / Markets / Stock Markets /  Debt free stock is 17% near to 52-week-high, ICICI Securities sees more upside in 3 months

With a market valuation of 41,960 crore, Abbott India Ltd. is a large cap company that operates in the pharmaceutical industry. The firm provides a wide variety of nutritional goods, medicinal gadgets, and diagnostic solutions. Abbott India Limited is a subsidiary of Abbott's global pharmaceutical business in India and one of the country's fastest-growing pharmaceutical firms. Abbott India shares have surged 13.03% in 1 year and on a year-to-date (YTD) basis the stock has gained 2.48% so far in 2022. The stock reached a 52-week high of 23,934.45 on October 5, 2021, and a 52-week low of 15,514.00 on February 8, 2022. As of right now, the price of the stock is 19,763, which puts it 17.42% close to its 52-week high and 27.38% above its 52-week low. The brokerage firm ICICI Securities has placed a buy call on the shares of Abbott India which is a debt-free company as per Value Research. The brokerage has set a buying range of 19200-19750 for the stock with a stop loss of 17,630.00 and a target price of 21,900.00. ICICI Securities has maintained a target frame of 3 months for the stock to reach its given target price.

The brokerage has said in a note that “Pharma stocks have witnessed a sharp decline over the past 10 months and been out of focus. Over the last couple of months, the pharma space has exhibited resilience signalling emergence of relative strength and offers favourable risk-reward setup. Within MNC pharma companies, Abbot India is our top pick as the stock has been resilient in the recent market correction and is on the cusp of generating a breakout above the last six month’s range ( 19600-15520) signalling resumption of up move and offers a fresh entry opportunity."

ICICI Securities has said that “Buying demand is seen emerging in the stock from support area of 15500-16000 as it is confluence of rising demand line joining lows of CY20 ( 12186), CY21 ( 13960) and rising 100 week’s EMA (currently at 16883). Historically in the last decade 100 week’s EMA has been tested only twice in CY13, CY17. In both cases it provided healthy returns in subsequent quarters. We expect the stock to maintain positive bias and head towards 21900 levels in the coming months as it is the 80% retracement of the entire decline (23934-15514)."

“Abbott has been consistent in brand-driven growth driven by favourable market dynamics with doctor prescription stickiness and lower perceived risk factors. The company remains focused on new launches, which is fairly consistent (+100 launches and line extensions in the last 10 years. NLEM price hike of ~10.8% for estimated NLEM portfolio exposure of ~21% for Abbott is also likely to have a positive impact on price led growth in FY23. Revenues have grown at a CAGR of 11.1% over the last five years from FY17-22. At the same time, EBITDA margins have improved from 13.7% in FY17 to 22.1% in FY22. We expect Abbott to grow at 12% CAGR over FY22-24E and further improve its margin profile to 23.8%," said the brokerage.

“We remain positive on the company due to its robust and sustainable business model backed by stable growth, debtfree b/s, favourable market dynamics with doctor prescription stickiness and lower perceived risk factors. We continue to believe in Abbott’s strong growth track in power brands and capability of new launches on a fairly consistent basis," ICICI Securities has claimed.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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