Re: {LONGTERMINVESTORS} Abbott India...Thread
RAJESH DESAI
Angel Broking has recommended `Accumulate` on Abbott India with a price target of Rs 1,628
For 1QCY2012, Abbott India reported a muted set of numbers. The company`s top line was marginally lower by 2.7% qoq, from Rs 3.86 billion to Rs 3.76 billion. Numbers are not comparable to 1QCY2011, as the company`s results were merged with that of Solvay Pharma in August 2011.
The company`s EBITDA margin contracted by 648bp qoq in 1QCY2012, mainly due to increased employee expenses and other expenses. Depreciation for the quarter increased by 25% qoq, while tax rate stood at 41.9%, thus leading to muted PAT. The company made provisions of Rs 186.9 million for change in its accounting for sales return and change its depreciation method to straight line method from written-down methods, resulting in write back of depreciation of Rs 290.8 million.
We recommend Accumulate on the stock with a revised target price of Rs 1,628, based on a target PE of 18x for CY2013.
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CA. Rajesh Desai