Hoe easily we discount our INDIAN pharma companies for poor quality but when we read such things from global giants then there is news report on front page.
this is different from Abbott India, the listed company
i am recently reading the book “What I learned about investing from Darwin” by Pulak Prasad from Nalanda Capital. In the 1st chapter itself he tells about businesses they try to avoid in Nalanda Capital. One of the category they have cited is MNC companies who are having Indian listed subsidiary and still they have other un-listed Indian subsidiary and they launch good brands under the un-listed category and thus create value addition to Parent MNC company at the expense of minority shareholders of Indian Listed subsidiary.
They have given examples of Unilever, Nestle but not Abbott.
rather I am not aware if in case of Hindustan Unilever and Nestle India, whether there is any un-listed subsidiary of Parent MNC companies operating in same segment.
but their description applies to Abbott India perfectly. They also talked about how Parent MNC sends good managers to Un-listed subsidiary while not-so-good to listed subsidiary.
they have recommended to avoid such indian listed subsidiaries of MNCs. In the long run it wont be in the interest of minority shareholders and why should we allow these MNCs to treat us like second class citizens?
but also the truth is that in case of Abbott India, shareholders have got very good returns in last decade.
so, in short, overall i am confused as to how to look at this situation. I hold Aboott India almost 3% in my portfolio. And like Nalanda Capital, I would think of myself , becoming permanent owner of it…not a short term view. If members can help me form a view
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I agree with your sentiment.
But as economist Thomas Sowell says,
There are no solutions, there are only trade-offs; and you try to get the best trade-off you can get, that’s all you can hope for.
You cannot invest directly in the unlisted entity in India. You can invest in the global entity if that satisfies your investment philosophy. Else, stay invested in Abbott India until you have an investment opportunity with better conviction. There could be a case that Abbott with subpar managers could be a better investment than other opportunities you have.
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I was reading Annual Report published yesterday.
10 year Sales CAGR given is 8.8% while screener shows 10 year sales CAGR as 12%
similarly
10 year PAT CAGR in AR given is 16.9% while in screener its 21%
why so much difference? and Company will not show less numbers in their AR…
Consider AR.
Company’s reporting moved from Calendar Yr to Financial Yr. [Dec 2012 → Mar 2014]. Screener values are formula driven and missing this aspect.
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Q1FY2023-24 Result
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Abbott India Limited has released its unaudited financial results for the quarter and half-year
For the Quarter Ended September 30, 2023:
- The total income for the quarter was Rs. 1,549.65 crores, with revenue from operations of Rs. 1,494.14 crores.
- The profit before tax was Rs. 805.91 crores.
- The net profit for the quarter was Rs. 312.94 crores.
- Earnings per equity share (basic/diluted) for the quarter was Rs. 15.00.
For the Six Months Ended September 30, 2023:
- The total income for the six months was Rs. 3,084.65 crores, with revenue from operations of Rs. 2,973.14 crores.
- The profit before tax was Rs. 1,431.41 crores.
- The net profit for the six months was Rs. 604.99 crores.
- Earnings per equity share (basic/diluted) for the six months was Rs. 29.00.
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Can you please compare this with last year and last quarter figures to know the change?
Sales growth has slowed while margin seems to be have peaked…
And given that its trading at such high PE, i suspect markets might like to see the growth coming back else i fear it can also continue to move sideways like HUL
Not clear why would they refer to 2021 data to exit the stock in 2023. Also, does this product contribute significantly to Abbott to have a very high impact ?
they exited in 2022 Jan
MD, Vivek Kamath resigns; last working day March 2024. To pursue opportunities outside…
From Screener: “The company has delivered a poor sales growth of 10.2% over past five years.”
Q3FY2023-24 QUARTERLY RESULTS
Financials
My thesis on Abbott India Ltd. Please feel free to critique and punch holes in the reasoning.