ABBOTT INDIA Stay invested

Better recognised as the ‘Brufen’ or ‘Digene’ company, Abbott India is an excellent pharma company, with a very healthy balance sheet. Yet, looks like the rising costs have impacted this pedigreed blue chip company too.
The company follows the October-November fiscal and it has now presented the financial performance for the second quarter ended 31st August 2008. YoY, net sales of the company rose 14% but operating expenses ate away 85% of the revenue earned, leading to the OPM fall from 19.63% to 16.13%. EBITDA showed a fall of 6% and thankfully, the company being debt free, has got virtually no interest outgo. Depreciation is also miniscule. PBT fell 8%. Tax outgo was maintained at Rs.9.56 crore yet, the damage had been done. PAT was down 12%. NPM slipped from 12.62% to 9.73%.

Yet, this can be taken as a blip, another company which fell victim to the current circumstances. The company remains strong. It recently concluded buying back part of its shares, it bought back 797,500 fully paid up equity shares of Rs 10 each, at a price of Rs 630 per share, after which, its equity capital now stands reduced at Rs.13.67 crore, from earlier Rs.14.47 crore. Promoters holding post buy back has increased from 65.14% to 68.94%, that of FIIs has reduced to 0.73% (0.75%); financial institutions to 6% (8.79%). Public holding has come down to 24.33% (25.32%).

The main revenue earner for the company is its diabetic medicines. Its OTC drugs Brufen and Digene are leaders in their respective segments in India. Stay invested.
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