ABBOTINDIA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 4.1

📊 Core Financials

• Revenue & Profitability: PAT improved from 366 Cr. to 415 Cr. (Qtr Var +15.8%), showing consistent growth.
• Margins: ROE at 35.7% and ROCE at 46.2% reflect excellent efficiency and profitability.
• Debt: Debt-to-equity ratio of 0.05 indicates virtually debt-free operations.
• Cash Flow: Dividend yield of 1.70% provides stable shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 39.4 vs Industry PE of 30.6 — trading at a premium.
• P/B Ratio: Current Price 28,000 ₹ vs Book Value 1,888 ₹ → ~14.8x, expensive.
• PEG Ratio: 1.88, suggesting growth is not fully aligned with valuation.
• Intrinsic Value: Current valuation is stretched, but supported by strong fundamentals.

🏢 Business Model & Competitive Advantage

• Abbott India operates in pharmaceuticals and healthcare, with a strong portfolio of branded generics and specialty drugs.
• Competitive advantage lies in global expertise, brand trust, and diversified product offerings.
• Strong profitability and efficiency metrics support long-term sustainability.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near 25,500–26,500 ₹ range, closer to support levels and below DMA 200.
• Long-Term Holding: Strong fundamentals and industry positioning make Abbott India suitable for long-term holding, though valuations are high.

✅ Positive

• High ROCE (46.2%) and ROE (35.7%) show excellent efficiency.
• Virtually debt-free (Debt-to-equity 0.05).
• Consistent PAT growth (+15.8%).
• Dividend yield of 1.70% provides stable returns.

⚠️ Limitation

• High P/E (39.4) and P/B (~14.8x) make the stock expensive compared to peers.
• PEG ratio (1.88) suggests growth does not fully justify valuation.
• RSI at 37 indicates weak technical momentum.

📉 Company Negative News

• DII holding reduced slightly (-0.07%), showing minor decline in domestic institutional confidence.
• MACD (-498) indicates bearish technical sentiment.

📈 Company Positive News

• PAT growth highlights operational strength.
• Stable dividend yield supports investor confidence.
• FII holdings remained steady, showing sustained foreign investor interest.

🌐 Industry

• Industry PE at 30.6, lower than Abbott India’s valuation, indicating sector optimism but company trades at premium.
• Pharmaceutical sector benefits from rising healthcare demand, innovation, and government support.

🔎 Conclusion

• Abbott India is fundamentally strong with excellent profitability, efficiency, and virtually no debt.
• Valuations are stretched compared to industry peers, making current entry less attractive.
• Best suited for accumulation near 25,500–26,500 ₹ levels.
• Long-term investors can hold for stability and growth in healthcare demand.