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Centrum Broking Report
Abbott India Ltd.'s Q2 FY23 sales grew by 13% YoY and 6% QoQ to Rs 13.8 billion (in-line with our expectation). Growth was driven by strong traction in major brands i.e Udiliv, Thyronorm, Duphalac, Vertin and Cremaffin Plus.
A better product mix offset raw material cost pressures. Gross margin contracted 108 bps YoY and 53 bps QoQ to 45.5%. However, decline in promotional and other overhead cost led to Ebitda margin expansion of 364 bps YoY and 416 bps QoQ at 25%.
Absolute Ebitda grew 32% YoY and 27% QoQ to Rs 3.4 billion. Profit after tax for the quarter grew by 38% YoY and 29% QoQ to Rs 2.7 billion. As of now new products account for ~3% growth, which indicates its ability to introduce promising products ahead.
Having strong set of brands, with highest medical representative productivity among Abbott India's domestic peers, and its ability to grow ahead of the market, backed by price increases and traction in new launches.
Cash on books also may be utilized for merger and acquisition in consumer health and vaccine brands.
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