Abbott India (ABBOTINDIA)
StalwartFairStock Score: 63/100 — STEADY
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹27,060 |
| Market Cap | ₹57,500.61 Cr |
| P/E Ratio | 35.59 |
| ROCE | 46.25% |
| ROE | 36% |
| Dividend Yield | 1.94% |
| Profit Growth | 17.1% |
| Debt/Equity | 0.04 |
| Sales Growth | 8.7% |
| Free Cash Flow | ₹1,194.02 Cr |
| Promoter Holding | 74.99% |
| 52-Week Range | ₹25,140.5 — ₹31,495 |
| Sector | Pharmaceuticals & Biotechnology |
| Book Value | ₹2,246.75 |
Strengths
- Exceptional profitability: ROE 36%, ROCE 46.25%, and latest quarter net margin around 22%
- Fortress balance sheet: Debt/Equity 0.05 with strong free cash flow of ₹1,194 Cr
- High promoter holding of 74.99% aligns management with minority investors
- Piotroski F-Score of 8/9 and Altman Z-Score of 8.60 indicate strong financial health
- Profit growth of 14.21% is outpacing sales growth of 9.31%, showing operating leverage
Concerns
- Extremely expensive valuation: P/E 36.99, P/B 12.76, far above Graham Number of ₹5,676.58 and DCF value of ₹6,988.47
- Margin of safety is deeply negative at -367.36%
- PEG ratio of 4.59 suggests the growth rate does not justify the earnings multiple
- Sales growth of just 9.31% is moderate, leaving little room for error at this price
AI Analysis
At first glance, Abbott India is the kind of business I admire: high returns on equity and capital, negligible debt, and consistent cash generation. With ROE at 36% and ROCE at 46.25%, it earns far more than its cost of capital, and a debt-equity ratio of 0.05 means the balance sheet is a fortress. Free cash flow of ₹1,194 Cr supports the quality. The latest quarter shows net profit of ₹376 Cr on sales of ₹1,724 Cr, roughly a 22% margin. Promoter holding at 74.99% is a good sign. But Graham taught me to pay a fair price for excellence. Here the price is the problem. At ₹25,422, the P/E is 36.99 times earnings and P/B is 12.76 times book. The Graham Number of ₹5,676.58 and DCF value of ₹6,988.47 are far below the market price, giving a margin of safety of minus 367%. In other words, I am paying for years of perfect execution. Sales growth of 9.31% and profit growth of 14.21% are solid but not spectacular enough to justify a PEG of 4.59. The Piotroski score of 8/9 and Altman Z of 8.60 tell me the company is operationally sound; the concern is entirely price. This is a wonderful stalwart, but I would wait for a much lower entry point or a meaningful improvement in growth before putting new money to work.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer