Abbott India posts Q2 profit rise on strong demand, price hikes

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(Reuters) – Drugmaker Abbott India reported a rise in second-quarter profit on Thursday, helped by strong demand for its gastrointestinal and anti-infective medications.

The company, which makes the antacid Digene, reported a profit of 3.59 billion rupees ($42.6 million) for the quarter ended Sept. 30, up nearly 15% from last year.

Revenue from operations climbed 9.3% to 16.33 billion rupees.

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KEY CONTEXT

Drugmakers such as Abbott India and rival GlaxoSmithKline Pharmaceuticals, who earn most of their revenue from India, have hiked prices of certain drugs not included in the Indian government’s price-capped ‘essential medicines list’ to boost their earnings, analysts have said.

Abbott India continued to benefit from anti-infectives and medications for gastrointestinal conditions, the company said in its latest annual report.

Last week, rival GlaxoSmithKline Pharma reported higher second-quarter profit, boosted by demand for generic drugs and vaccines.

PEER COMPARISON

Estimates (next 12 Analysts’ sentiment

months)

RIC PE EV/EBI Revenue Profit Mean # of Stock to Div

TDA growth (%) growth rating* analyst price yield

(%) s target** (%)

Abbott India Ltd 42.94 33.38 9.56 12.79 Strong 4 0.97 1.41

Buy

GlaxoSmithKline 47.93 35.40 8.96 33.60 Buy 4 0.90 1.22

Pharmaceuticals

Ltd

Pfizer Ltd 33.98 26.54 7.92 16.77 Buy 3 0.85 0.66

Aurobindo Pharma 18.80 10.86 9.61 17.80 Buy 26 0.89 0.32

Ltd

* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT

JULY TO SEPTEMBER STOCK PERFORMANCE

— All data from LSEG

— $1 = 84.3475 Indian rupees

(Reporting by Kashish Tandon in Bengaluru; Editing by Varun H K)