Advisory Desk

January 14, 2012

Abbott India

BUY

CMP

`1,434

M&A, strategic alliance gives a headstart

Target Price

`1,852

Abbott India (AIL), a 50.44% subsidiary of Abbott Capital India Ltd., UK, is

Investment Period

12 Months

involved in the manufacture and marketing of pharmaceutical, diagnostic,

nutritional and hospital products. Consolidation of Solvay Pharma India Ltd. (SPIL)

Stock Info

with the company is expected to improve operating efficiencies, leading to

Sector

Pharmaceuticals

expansion of EBITDA margin and an extended product portfolio with addition of

Market Cap (` cr)

3,046

brands from SPIL. We expect the company to post a 24% CAGR top-line over

Beta

0.4

CY2010-13E on the back of continued focus on advertising, increased employee

52 Week High / Low

176 / 292

expenses, new therapeutic segments and its agreement with Zydus Cadila. At the

Avg. Daily Volume

1,667

current price of `1,434, the stock is trading at 13.9x CY2013E EPS, which we

Face Value (`)

BSE Sensex

16,155

believe is attractive for an MNC. We Initiate Coverage on AIL with a Buy rating

Nifty

4,866

and a target price of `1,852.

Reuters Code

ABOT.BO

Synergies with SPIL to improve the business model: Amalgamation of SPIL with AIL

Bloomberg Code

BOOT IN

expanded the company’s product portfolio, giving access to untapped therapeutic

segments, in addition to increasing exposure to its existing therapeutic segments.

Shareholding Pattern (%)

Besides increased revenue, the synergy between the two companies is expected to

Promoters

75.0

improve operating efficiencies, thus leading to margin expansion.

MF / Banks / Indian Fls

5.3

Multiple revenue drivers to facilitate 24% CAGR top-line growth: AIL’s expenditure

FII / NRIs / OCBs

2.3

on advertisement and employee as a percent of sales has been continuously

Indian Public / Others

17.5

increasing since CY2006. Continued focus on these factors is expected to drive

revenues going forward. Moreover, AIL’s focus on therapeutic areas such as

diagnostics and nutrition; and its agreement with Zydus Cadila (India) to market

Abs. (%)

3m 1yr 3yr

25 products in emerging markets from CY2013E could further add to revenues.

Sensex

(4.3)

(15.8)

78.1

ABBOTINDIA

(1.2)

12.2

247.5

Debt-free, cash-rich with higher returns: We expect AIL’s cash reserves and RoIC

to increase to `594cr and 114.3%, respectively, by CY2013E, aided by additional

cash from SPIL, which was also a cash-rich company. Due to excess cash in the

books, we believe it may be a potential delisting candidate.

Key financials

Y/E December (` cr)

CY2010 CY2011E

CY2012E CY2013E

Net sales

1,037

1,516

1,734

1,979

% chg

30.5

46.2

14.4

14.1

Net profit

135

180

219

% chg

(21.4)

120.8

33.4

21.6

EBITDA (%)

6.7

13.0

13.8

14.3

EPS (`)

44.6

63.4

84.6

102.9

P/E (x)

49.9

22.6

16.9

13.9

P/BV (x)

10.0

5.4

4.3

3.5

RoE (%)

21.2

30.9

28.4

27.7

RoCE (%)

24.0

41.2

34.9

33.4

EV/Sales (x)

2.8

1.8

1.5

1.2

Shareen Batatawala

+91-22-3935 7800 Ext: 6849

EV/EBITDA (x)

41.2

13.6

10.7

8.5

[email protected]

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

Advisory Desk

Abbott India

Investment arguments

Synergies with SPIL to improve the business model

Product portfolio to expand - Giving access to newer segments

Expansion of product portfolio and

AIL had a gastroenterology portfolio comprising Digene, Cremaffin and Ganaton.

access to new therapeutic segments to

Digene is the market leader in the antacid segment with 35% market share, while

drive future top-line growth

Cremaffin is a leader in the laxative segment. With the addition of Duphalac,

Creon and Udiliv through the merger of SPIL, the company would become a leader

in the gastroenterology segment in India.

The company would also gain access to the women’s health segment with products

such as Duphaston, Duvadilan, Pro-9, Life and B-crip post-merger. Duphaston

contributed 23% to the total revenue of SPIL in CY2010.

Moreover, AIL’s CNS portfolio will strengthen with the addition of SPIL’s Vertin, a

market leader in the vertigo segment in India.

Contribution margin to witness an uptrend

Better product mix facilitates superior

The company’s net raw-material cost as a percent of sales is expected to decline to

margins

~56% in CY2013E from 62.4% in CY2010 on account of change in business mix

for the combined entity. As a result, the contribution margin will witness a

northward shift from an average of ~11% for CY2006-10 to 14.3% in CY2013E.

Exhibit 1: Declining raw-material cost (%) to expand EBITDA margin

1,200

1,000

800

600

400

200

CY2008

CY2009

CY2010

CY2011E CY2012E CY2013E

Net raw material cost (LHS)

% of net sales (RHS)

Source: Company, Angel Research(*CY2011E-13E are consolidated results for AIL and SPIL)

January 14, 2012

Advisory Desk

Abbott India

Extended therapeutic focus & alliances to facilitate growth

Focus on therapeutic segments like

AIL is present across different segments such as pain management,

nutrition and diagnostic, along with the

gastroenterology, metabolic, urology, thyroid, diabetes, neurology, anesthesiology

marketing agreement with Zydus Cadila

and neonatology. The company has some of the leading pharmaceutical brands

to drive top-line growth

such as Digene, Cremaffin, Brufen, Thyronorm, Zolfresh and Pediasure, which are

the main revenue drivers. The company has collaborated with the government and

schools to increase awareness about child nutrition, thus expanding its focus on the

nutritional segment with its product Pediasure, which is a market leader in nutrition

products. AIL also plans to increase its exposure in the diagnostics segment, which

has immense growth prospects. We believe these measures would significantly

increase the company’s revenue over 2-3 years.

The company recently entered into an agreement with Zydus Cadila to market 25

products in 14 emerging markets from CY2013E, which would add to company’s

revenue going forward.

Cash-rich company with higher return ratios

Cash rich company - A potential for

AIL is a debt-free company with cash reserves of `189cr as of December 2010,

delisting

and RoE and RoIC of 21.2% and 65.6%, respectively, for CY2010. Post the merger

with SPIL, which was also a debt-free entity with cash reserves of `51cr for

CY2010, we expect the cash to increase to `330cr by CY2011 end, while RoE and

RoIC would increase to 30.9% and 115.4%, respectively, for CY2011E. Due to

high cash reserves in the books, we believe there is a potential that the company

may go for delisting.

January 14, 2012

Advisory Desk

Abbott India

Financials

Exhibit 2: Key assumptions

CY2011E

CY2012E

CY2013E

Revenue growth (AIL)

12.5

12.9

12.3

Revenue growth (SPIL)

19.5

19.0

19.8

Operating margin (%)

13.0

13.8

14.3

Source: Company, Angel Research

Top line to grow at a 24% CAGR over CY2010-13E

We expect net sales to post a CAGR of

We expect the company’s revenue to grow at a CAGR of 24% over CY2010-13E,

24% over CY2010-13E driven by

from `1,037cr to `1,979cr. The 46% yoy surge in revenue in CY2011E is due to

merger with SPIL, increasing focus on

consolidation of results with SPIL.

advertisement and raising employee

count.

Exhibit 3: Revenue accelerates post merger

2,000

1,600

1,200

800

400

CY2008

CY2009

CY2010

CY2011E CY2012E CY2013E

Revenue

Revenue growth

Source: Company, Angel Research (*CY2011E-13E are consolidated results for AIL and SPIL)

Advertisement spends (percent of sales) increased from 2.5% in CY2006 to 4.3%

in CY2010; while employee expenses (percent of net sales) increased from 7.1% in

CY2006 to 12% in CY2010, enabling increase in employee count by 34% yoy in

CY2010 to 1,747. We expect the company to maintain its focus on these expenses

which form a critical part of the pharmaceutical industry thus facilitating medium to

long term revenue growth.

Exhibit 4: Continued focus on advertisement and employee spend to drive revenue growth

CY2006

CY2007

CY2008

CY2009

CY2010

CY2005 CY2006 CY2007 CY2008 CY2009 CY2010

Advertisement cost (LHS)

% of net sales (RHS)

Employee expense (LHS)

% of net sales (RHS)

Source: Company, Angel Research

January 14, 2012

Advisory Desk

Abbott India

Blended EBITDA margin to witness expansion

Higher EBITDA margins for SPIL and

Average EBITDA margin for SPIL was at ~24% for the past five years, while that of

better operating efficiencies facilitate

AIL has been at ~11% for the same period. Due to operating efficiencies post the

expansion of EBITDA margin for

merger, we expect EBITDA margins to expand to 14.3% in CY2013E.

merged entity.

Exhibit 5: Higher blended EBITDA margin vs. standalone (AIL) margins

CY2007

CY2008

CY2009

CY2010

CY2011E CY2012E CY2013E

Abbott India

Solvay Pharma

Merged

Source: Company, Angel Research

Exhibit 6: EBITDA headed northwards

300

200

250

150

200

100

150

100

(50)

CY2008

CY2009

CY2010

CY2011E CY2012E CY2013E

EBITDA (LHS)

yoy growth (RHS)

Source: Company, Angel Research (*CY2011E-13E are consolidated results for AIL and SPIL)

January 14, 2012

Advisory Desk

Abbott India

Improved business model to augment profit growth

Better net profit growth expected on

Amalgamation of AIL and SPIL along with other initiatives like focus on new

account of enhanced business model

therapeutic areas and Zydus Cadila agreement is expected to improve business

model for the merged entity. This would lead to better revenue and expansion of

EBITDA margin thus leading to better profitability. Hence, we expect the company’s

net profit to post a CAGR of 53% over CY2010-13E, from `61cr in CY2010 to

`219cr in CY2013E.

Exhibit 7: PAT to grow at 53% CAGR over CY10-13E

250

140

120

200

100

150

100

(20)

(40)

CY2008

CY2009

CY2010

CY2011E CY2012E CY2013E

PAT (LHS)

PAT growth (RHS)

Source: Company, Angel Research(*CY2011E-13E are consolidated results for AIL and SPIL)

January 14, 2012

Advisory Desk

Abbott India

Relative valuation

AIL ranks second among MNC pharmaceutical companies in terms of revenue

after GlaxoSmithKline Pharma. Post the merger with SPIL on January 1, 2011, the

company has moved upwards in its ranking (based on revenue) from the 4^th

position as of December 2010 to the 2nd position as of September

2011,

overtaking Pfizer and Aventis Pharma. The company is trading at cheap valuations

of 1.9x its EV/Sales as compared to its peers.

Exhibit 8: Peer comparison

Sales

OPM

PAT EPS

RoE

PE P/B

EV/Sales EV/EBITDA

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Glaxo

2,397

22.8

645

76.2

31.0

25.7

8.0

6.2

27.0

AIL

1,455

11.1

41.8

17.6

34.3

6.0

1.9

17.1

Aventis

1,276

21.1

207

89.8

18.7

25.3

4.7

3.7

17.5

Pfizer

1,083

17.4

176

59.0

14.1

18.6

2.6

2.2

12.7

Novartis

792

20.6

153

47.9

19.5

13.2

2.6

2.5

12.3

Wyeth

555

33.1

111

49.0

24.1

17.3

4.2

2.9

8.6

Astrazeneca

550

17.8

24.6

28.3

63.3

17.9

7.0

39.1

Source: Company, Angel Research (all figures are last 3 quarter annualized)

Outlook and valuation

We expect the company’s revenue and profit to post a CAGR of 24% and 53%,

respectively, over CY2010-13E, along with EBITDA margin expansion from an

average of ~11% for AIL for CY2006-10 to 14.3% for CY2013E. The stock is

currently trading at a PE of 13.9x and EV/Sales of 1.2x based on CY2013E

financials, which is considered cheap for an MNC pharmaceutical company.

Hence, we Initiate Coverage on the stock with a Buy recommendation and a target

price of `1,852, based on target PE of 18x for CY2013E and implied EV/sales of

1.7x for CY2013E.

Exhibit 9: One-year forward PE band

Exhibit 10: One-year forward EV/Sales band

2,000

3,500

3,000

1,600

2,500

1,200

2,000

1,500

800

1,000

400

500

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Price

12x

16x

20x

1.6x

1.2x

0.8x

0.4x

Source: Company, Angel Research

January 14, 2012

Advisory Desk

Abbott India

Key concerns

Shift of focus to the unlisted subsidiary

Abbott Laboratories, USA, bought the healthcare solution business from Piramal

Healthcare Ltd. (PHL) for a consideration of US$3.8bn, which was transferred to

the unlisted subsidiary, Abbott Healthcare Pvt. Ltd (AHPL). The transfer included

manufacturing facilities at Baddi, Himachal Pradesh; rights to approximately 350

brands and trademarks; and

~5,000 employees relating to its domestic

formulations business. Since the unlisted subsidiary is 100% owned with extended

portfolio from Piramal’s healthcare business, there is a possibility that the parent

company shifts its focus to the unlisted entity. Also, the merger would limit listed

AIL’s access to untapped therapeutic segments where PHL already exists.

Exhibit 11: Therapeutic segments of different companies

Segment

Abbott U.S

AIL

SPIL

AHPL

PHL

CNS

√

Gastroenterology

√

Pain Mgmt

√

Metabolic

√

Anesthesia

√

Neonatology

√

Women Health

√

Vaccine (Influenza)

√

Cardiovascular

√

Diabetes

√

Oncology

√

Dermatology

√

Orthopedic

√

Respiratory

√

Hepatitis

√

Immunology

√

Lipid Mgmt

√

Ophthalmology

√

Virology

√

Hormonal Treatment

√

Anti-infective

√

Urology

√

Stomatolosy

√

Nutritional

√

Source: Company, Angel Research

(√ indicates presence in the therapeutic segment and × indicates absence in the therapeutic

segment )

January 14, 2012

Advisory Desk

Abbott India

Impact of the new drug pricing policy

The New Pharmaceutical Pricing Policy (NPPP) draft note released by Department

of Pharmaceutical in 2011 is set to replace the Drug Policy of 1994. This new

policy is based on the revised National List of Essential Medicines (NLEM) released

in 2011, which includes 348 drugs instead of 74 drugs previously.

Following are the three key principles of the policy:

Essentiality of drugs: The policy would include drugs listed in NLEM 2011,

prepared on the basis of essentiality of drugs, rather than market share

principle implemented earlier

Market-based pricing (MBP): As per the policy, ceiling price would be decided

on the basis of Weighted Average Price (WAP) of the top three brands in the

segment. Price hikes would be allowed on an annual basis (on April 1) to the

limit of change in Wholesale Price Index (WPI) for manufactured goods. In

case of a decline in WPI, a corresponding reduction in the ceiling price would

be obligatory.

Control of formulation prices only: According to this principle, only the prices

of formulation would be under control, rather than the bulk drugs and its

formulations in the previous policy.

A higher number of drugs in the ambit of price control could hinder the profitability

of the company.

January 14, 2012

Advisory Desk

Abbott India

Company background

AIL is a 50.44% subsidiary of Abbott Capital India Ltd., UK, which is a subsidiary

of Abbott Laboratories, USA. The company has a strong distribution network with

18 distribution points, which caters to 11,000 stockists and 70,000 retailers. AIL

had over 1,747 employees as on December 2010 and a formulation facility at

Verna, Goa.

The company caters to five main segments, as follows:

Primary care: This segment mainly caters to pain management and

gastroenterology drugs with brands such as Brufen, Cremaffin, Cremahep, Surbex

and Ganaton.

Specialty care: This segment comprises therapeutic segments such as metabolics,

thyroid, diabetes and CNS with brands like Thyronorm, Zolfresh and Obimet.

Hospital care: This segment deals in anesthesiology and neonatology drugs,

including Forane, Sevorane, Survanta, Anatol IV and Pediasure.

Consumer healthcare (OTC): The OTC segment consists of Digene, a market

leader for antacids in India since the past six decades with a market share of 35%.

In August 2010, the company launched Digene Fastmelt, a line extension of

Digene.

Super speciality care: The company has forayed into the hepatic care sector in

2010 with the launch of the brand Heptral, a leading international

hepatoprotector. It is the first and only brand of Ademetionine (SD4 salt) approved

in India by DCGI.

Synergies with SPIL will take the company to leadership position in the

gastroenterology segment with the addition of products such as Duphalac, Creon

and Udiliv. AIL will also gain access to the growing women’s health segment

through Solvay’s branded portfolio comprising Duphaston and Duvadilan. In

addition, the company would strengthen its position in the CNS arena with the

addition of Vertin, a market leader in the vertigo segment.

January 14, 2012

Advisory Desk

Abbott India

Industry

The Indian pharmaceutical Industry (IPI) is globally the third largest producer of

medicines by volume, with a production turnover of over `1lakh crore in 2009-10,

comprising about `62,055cr of the domestic market and `46,787cr of exports. In

terms of value, the IPI stands at the 14^th position globally due to low-price Indian

medicines.

Exhibit 12: Composition of total domestic sales

Source: AIOCD, CRISIL , Angel Research

The pharmaceutical industry is divided into two major segments - acute therapy

segment and chronic therapy segment.

The acute therapy segment includes therapeutic segments such as anti-infectives,

gastroenterology, pain management and analgesic, which are commoditized in

nature.

The chronic therapy segment includes specialized segments such as diabetes,

cardiovascular, CNS, dermatology and oncology.

The Indian pharmaceutical industry grew at a rate of 16.5% yoy in CY2010 on the

back of increasing per capita income, growing health insurance penetration, better

health awareness, higher government expenditure, increase in chronic diseases,

innovative product launches due to product patents and expanded healthcare

access to rural and semi urban markets, aided by the projected annual GDP

growth of ~7% in the coming years.

As per PwC, the Indian pharmaceutical market is expected to post a CAGR of

15-20% over CY2010-15E. Rural markets present a huge opportunity for the

pharmaceutical market since the current penetration rate stands at 17%.

January 14, 2012

Advisory Desk

Abbott India

Profit and loss Account

Y/E December (` cr)

CY2008

CY2009

CY2010

CY2011E

CY2012E

CY2013E

Gross sales

705

800

1,043

1,534

1,753

2001

Less: Excise duty

Net Sales

696

795

1,037

1,516

1,734

1,979

Total operating income

696

795

1,037

1,516

1,734

1,979

% chg

11.8

14.2

30.5

46.2

14.4

14.1

Net Raw Materials

455

504

647

848

978

1,113

Other Mfg costs

Power & Fuel costs

Personnel

108

179

182

198

Other

109

121

196

270

309

356

Total Expenditure

620

697

967

1,319

1,495

1,696

EBITDA

197

239

283

% chg

(7.4)

28.7

(28.7)

183.2

21.8

18.0

(% of Net Sales)

10.9

12.2

6.7

13.0

13.8

14.3

Depreciation& Amortisation

EBIT

181

223

265

% chg

(9.7)

28.7

(34.1)

212.0

23.0

18.7

(% of Net Sales)

9.9

11.1

5.6

12.0

12.9

13.4

Interest & other charges

Other Income

(% of Net Sales)

3.7

3.5

1.3

2.6

3.1

PBT

117

201

268

326

% chg

(7.4)

24.4

(19.8)

113.7

33.4

21.6

Tax

108

(% of PBT)

33.3

33.9

35.2

33.0

PAT (reported)

135

180

219

ADJ. PAT

135

180

219

% chg

(9.0)

28.3

(21.4)

120.8

33.4

21.6

(% of Net Sales)

9.0

9.8

5.9

8.9

10.4

11.1

Basic EPS (`)

44.3

56.8

44.6

63.4

84.6

102.9

Fully Diluted EPS (`)

44.3

56.8

44.6

63.4

84.6

102.9

% chg

(3.7)

28.3

(21.4)

42.1

33.4

21.6

Note: CY2008 and 2009 are November ending. CY2011-13E are merged with SPIL

January 14, 2012

Advisory Desk

Abbott India

Balance Sheet

Y/E December (` cr)

CY2008

CY2009

CY2010 CY2011E

CY2012E CY2013E

SOURCES OF FUNDS

Equity Share Capital

Reserves& Surplus

208

258

292

545

680

854

Shareholders’ Funds

221

272

305

566

702

876

Total Loans

Deferred Tax Liability (Net)

(2)

Total Liabilities

226

274

306

564

699

873

APPLICATION OF FUNDS

Gross Block

107

118

199

219

240

Less: Acc. Depreciation

110

127

144

Net Block

Capital Work-in-Progress

Goodwill

Investments

Current Assets

300

339

403

661

822

1026

Cash

164

176

189

330

444

594

Loans & Advances

Inventory

102

129

201

230

263

Debtors

105

Current liabilities

125

114

148

223

252

286

Net Current Assets

175

225

255

438

570

739

Misc. Exp. not written off

Total Assets

226

274

306

564

699

873

Note: CY2008 & 09 are Nov ending. CY11- 13E are merged with SPIL

January 14, 2012

Advisory Desk

Abbott India

Cash Flow Statement

Y/E December (` cr)

CY2008 CY2009 CY2010 CY2011 CY2012E CY2013E

Profit before tax

117

201

268

326

Depreciation

Change in Working Capital

(37)

(18)

(41)

(18)

(19)

Other income

(26)

(29)

(36)

(20)

(45)

Direct taxes paid

(31)

(40)

(33)

(66)

(89)

(108)

Others

Cash Flow from Operations

158

172

(Inc.)/Dec. in Fixed Assets

(20)

(6)

(12)

(18)

(20)

(22)

(Inc.)/Dec. in Investments

150

(37)

Other income

Others

(15)

(25)

(40)

Cash Flow from Investing

140

(2)

(16)

(35)

Issue of Equity

(1)

Inc./(Dec.) in loans

(0)

(1)

Dividend Paid (Incl. Tax)

(22)

(27)

(42)

(45)

Others

(58)

(0)

Cash Flow from Financing

(81)

(23)

(27)

(45)

Inc./(Dec.) in Cash

146

*142

113

150

Opening Cash balances

164

176

189

330

444

Closing Cash balances

164

176

189

330

444

594

Note: CY2008 & 09 are Nov ending. CY11- 13E are merged with SPIL; *includes previous years

cash of SPIL

January 14, 2012

Advisory Desk

Abbott India

Key Ratio’s

Y/E December

CY2008

CY2009

CY2010

CY2011

CY2012E

CY2013E

Valuation Ratio (x)

P/E (on FDEPS)

50.3

39.2

49.9

22.6

16.9

13.9

P/CEPS

49.4

63.4

52.9

20.3

15.5

12.9

P/BV

13.8

11.2

10.0

5.4

4.3

3.5

Dividend yield (%)

1.0

1.2

1.3

EV/Sales

4.1

3.6

2.8

1.8

1.5

1.2

EV/EBITDA

38.2

29.5

41.2

13.6

10.7

8.5

EV / Total Assets

13.0

10.6

9.4

4.7

3.6

2.7

Per Share Data (`)

EPS (Basic)

46.0

56.7

44.6

63.4

84.6

102.9

EPS (fully diluted)

44.3

56.8

44.6

63.4

84.6

102.9

Cash EPS

49.4

63.4

52.9

70.5

92.2

111.2

DPS

14.0

17.0

18.0

Book Value

161.8

198.6

223.3

266.6

330.2

412.1

DuPont Analysis

EBIT margin

10.9

12.2

6.7

12.0

12.9

13.4

Tax retention ratio

0.7

0.6

0.7

Asset turnover (x)

11.6

10.5

9.8

7.5

7.7

8.0

RoIC (Post-tax)

84.0

84.7

42.5

59.8

66.5

71.4

Cost of Debt (Post Tax)

1.5

34.8

Leverage (x)

(0.7)

(0.6)

(0.7)

Operating RoE

169.1

193.5

Returns (%)

RoCE (Pre-tax)

33.3

39.3

24.0

41.2

34.9

33.4

Angel RoIC (Pre-tax)

126.0

128.3

65.6

115.4

106.7

114.3

RoE

26.8

31.5

21.2

30.9

28.4

27.7

Turnover ratios (x)

Asset TO (Gross Block)

7.8

7.7

9.2

9.6

8.3

8.6

Inventory / Sales (days)

Receivables (days)

Payables (days)

WC (ex-cash) (days)

Solvency ratios (x)

Net debt to equity

(0.7)

(0.6)

(0.7)

Net debt to EBITDA

(2.2)

(1.8)

(2.7)

(1.9)

(2.0)

(2.2)

Interest Cov. (EBIT / Int.)

3777

485

1734

9071

Note: CY2008 & 09 are Nov ending. CY11- 13E are merged with SPIL

January 14, 2012

Advisory Desk

Abbott India

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

DISCLAIMER

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and

risks of such an investment.

Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make

investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this

document are those of the analyst, and the company may or may not subscribe to all the views expressed within.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and

trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable

sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this

document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way

responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.

Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,

nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While

Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory,

compliance, or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly.

Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or

other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in

the past.

Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in

connection with the use of this information.

Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the

latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have

investment positions in the stocks recommended in this report.

Disclosure of Interest Statement

Abbott India Ltd.

1. Analyst ownership of the stock

2. Angel and its Group companies ownership of the stock

3. Angel and its Group companies' Directors ownership of the stock

4. Broking relationship with company covered

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%)

Accumulate (5% to 15%)

Neutral (-5 to 5%)

Reduce (-5% to 15%)

Sell (< -15%)

January 14, 2012