Rebound in domestic market lifts Abbott India’s prospects

Pricing pressure in the US or currency headwinds have been some of the factors that have impacted the performance of many domestic firms.

“Abbott’s power brands in the Indian markets command a leadership position in their respective segments. The sturdy performance of these brands is expected to continue, given the brand-building and patient outreach efforts being implemented,” said analysts at Sharekhan.

View Full Image

In May, the firm reported a 42.4% year-on-year (y-o-y) growth, led by its branded formulations portfolio. While some of this was, of course, due to a low base, the firm’s trailing 12-month growth of 11.4% was impressive. During Q4, the firm had reported 14% y-o-y growth, outperforming the pharma market growth.

Analysts at Centrum Stock Broking Ltd said: “The management of Abbott is confident of double-digit growth rate, as the Indian pharmaceutical market is showing signs of recovery at the start of FY22. Its strategy is to provide differentiated products with innovative formulations, delivery solutions and newer packaging, including life cycle management of legacy brands.”

Among other factors that can drive growth include the firm’s well-penetrated distribution network in metro and tier-I cities, as it gradually expands to tier-II and tier-III cities, coupled with a strong product launch pipeline.

While it has popular products for children and the elderly, women’s health is a key focus area. The company has leading brands like Duphaston (hormone), and treatments for menopause, endometriosis and labour management are new additions, said analysts.

Gastrointestinal therapy remains another key driver for Abbott India with well-established brands such as Cremaffin Plus, Udiliv and Dufflac. The company has also shifted the manufacturing of two key products, Duphalac and Udiliv, to its Goa plant from third-party manufacturers and is in the process of shifting a few more products.