ABBOTINDIA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | ABBOTINDIA | Market Cap | 59,277 Cr. | Current Price | 27,825 ₹ | High / Low | 37,000 ₹ |
| Stock P/E | 38.2 | Book Value | 2,247 ₹ | Dividend Yield | 1.71 % | ROCE | 44.9 % |
| ROE | 34.5 % | Face Value | 10.0 ₹ | DMA 50 | 26,686 ₹ | DMA 200 | 28,022 ₹ |
| Chg in FII Hold | 0.08 % | Chg in DII Hold | -0.07 % | PAT Qtr | 395 Cr. | PAT Prev Qtr | 376 Cr. |
| RSI | 63.4 | MACD | 500 | Volume | 11,611 | Avg Vol 1Wk | 8,988 |
| Low price | 25,150 ₹ | High price | 37,000 ₹ | PEG Ratio | 2.15 | Debt to equity | 0.04 |
| 52w Index | 22.6 % | Qtr Profit Var | 7.60 % | EPS | 730 ₹ | Industry PE | 30.5 |
📊 Financials: Abbott India (ABBOTINDIA) demonstrates strong fundamentals with ROE at 34.5% and ROCE at 44.9%, reflecting excellent efficiency. Debt-to-equity is very low at 0.04, indicating a virtually debt-free balance sheet. Quarterly PAT rose to ₹395 Cr. from ₹376 Cr., showing a 7.6% variance. EPS stands at ₹730, highlighting robust earnings power.
💰 Valuation: The stock trades at a P/E of 38.2 compared to the industry average of 30.5, suggesting a premium valuation. P/B ratio is ~12.4 (Price ₹27,825 / Book Value ₹2,247). PEG ratio of 2.15 indicates expensive growth-adjusted valuation. Intrinsic value appears lower than current price, making entry less attractive at present levels.
🏢 Business Model: Abbott India operates in pharmaceuticals and healthcare, leveraging global brand strength, R&D capabilities, and diversified product offerings. Its competitive advantage lies in innovation, strong distribution, and leadership in therapeutic segments. Overall health is excellent, supported by high returns and low leverage.
📈 Entry Zone: A more attractive entry would be near ₹25,500–26,500, closer to its 52-week low. Current valuation is stretched. Long-term holding is favorable given strong fundamentals and industry demand, but investors should wait for better valuation levels before fresh entry.
Positive
- 📌 Strong ROE (34.5%) and ROCE (44.9%)
- 📌 Virtually debt-free (Debt-to-equity 0.04)
- 📌 EPS of ₹730 reflects robust earnings
- 📌 Dividend yield of 1.71% provides income
Limitation
- ⚠️ High P/E ratio (38.2) vs industry average (30.5)
- ⚠️ Expensive P/B ratio (~12.4)
- ⚠️ PEG ratio of 2.15 signals costly growth
- ⚠️ Quarterly PAT growth modest at 7.6%
Company Negative News
- 📉 Slight decline in DII holdings (-0.07%)
Company Positive News
- 📈 Increase in FII holdings (+0.08%)
- 📈 Consistent quarterly profit growth
Industry
- 🏦 Industry PE at 30.5, lower than Abbott India’s valuation
- 📊 Pharmaceutical sector benefits from rising healthcare demand in India
Conclusion
🔎 Abbott India is fundamentally strong with excellent return ratios, robust earnings, and negligible debt. However, current valuations are stretched. Entry is advisable near ₹25,500–26,500. Long-term holding is favorable given strong fundamentals and industry demand, but investors should be cautious about valuation risks.
Would you like me to also prepare a valuation comparison chart between Abbott India and pharma industry peers to highlight its premium positioning?