Hold Pfizer Ltd For Target Rs . 3830 - ICICI Direct
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Slowdown in key power brands impacts sales…
About the stock: Pfizer collectively addresses 15 therapy areas in domestic formulations with a portfolio of over 150 products that include therapeutics & vaccines. The company has been continuously restructuring its portfolio in the last few years to improve the productivity of its core brands.
* Fourth largest multinational pharma company in India
* Manufacturing facility in Goa with run rate of 1 billion tablets per annum
Q4FY23 Results: Margins in line but revenue missed.
* Revenue grew 4.2% to | 572.6 crore
* On the operational front, EBITDA grew 10% YoY to | 182 crore whereas margins grew 166 bps YoY to 31.8%
* PAT came in at | 149.2 crore
What should investors do? Pfizer’s share price has de-grown at 3.13% CAGR for the past three years.
* We maintain HOLD as we keep watch on uptick in power brands momentum post Covid impact and implications of the VRS scheme for the field force
Target Price and Valuation: Valued at | 3830 i.e. 26x P/E on FY25E EPS of | 147.2
Key triggers for future price performance:
* Addressing apparent slowdown in key brands like Eliquis, Becosules, Wysolone, Mucaine among others which, after growing decently since 2020, have slowed down in FY23
* Measured approach with de-focusing and hiving off of tail brands and focus on core therapies like vaccines, pain management, VMS, GI and CVS
* Traction in key power brands after the MR rationalisation
* Overall performance in the backdrop of key patent expiries, competition in Prevnar-13
Alternate Stock Idea: Apart from Pfizer, among MNC coverage we like P&G Health.
* Procter & Gamble Health is a leading pharma cum OTC company with key focus on vitamins, minerals, supplement (VMS). Its recent earnings reflect sustained efforts to regain momentum via improved mix and productivity initiatives
* BUY with a target price of | 5620
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