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ICICI Direct
Pfizer (Buy)
Target: ₹4,740
CMP: ₹4,090.15
Pfizer's Q4-FY20 revenues declined 6.3 per cent YoY to ₹502 crore due to divestiture of certain brands and Covid-19 related challenges (adjusted growth about 4 per cent). EBITDA margins contracted 653 bps to 21.7 per cent YoY due to higher raw material and personnel costs. Subsequently, EBITDA came in at ₹108.7 crore, down 28 per cent YoY.
Net profit de-grew 5.9 per cent YoY to ₹103 crore. In FY20, revenues grew 3.4 per cent YoY to ₹2,152 crore (adjusted growth of about 6 per cent). EBITDA margins declined slightly by 54 bps to 26.6 per cent with EBITDA remaining flat at ₹573 crore (₹565 crore in FY19). However, net profit grew 18.7 per cent YoY to ₹509 crore, mainly due to a significant decline in tax outgo.
Pharma MNCs with domestic focus continue to drive investor’s interest on the back of: consistency in stable growth despite higher competition and regulatory changes; strong focus on legacy power brands as well as introduction from global parent’s staple; consistent free cash-flow generation; debt-free balance sheet, strong core RoEs; healthy dividend payout track record.
We continue to believe in Pfizer’s strong growth track record in power brands and capability in new launches.
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