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ICICI Securities
Pfizer (Buy)
CMP: ₹4,078
Target: ₹4,705
Pfizer Limited’s (PFL) Q4FY20 performance was weak during the quarter. Revenue declined 6.3 per cent y-o-y to ₹500 crore (ICICI Securities est: ₹630 crore). Revenue was impacted by divestment of two brands in Q3FY20 and Covid-19. Adjusted growth was 3.5 per cent.
EBITDA margin declined 650 bps y-o-y (-310 bps q-o-q) to 21.7 per cent (lowest in several quarters) due to lower revenue. Adjusted PAT declined 5.9 per cent y-o-y to ₹100 crore.
Dichotomy between primary and secondary sales continue as AIOCD data suggests revenue growth for the company was 12.5 per cent. We expect this disparity to normalise in the coming quarters.
We remain positive on the company’s growth visibility with exposure only in domestic formulations and strong balance sheet with deep cash reserves, however, pressure due to Covid-19 would restrict growth in the near term as the company’s product portfolio is largely acute (about 75 per cent). Maintain ‘buy’.
Key downside risks are: a) addition of key drugs in NLEM, product concentration; government intervention; and presence of unlisted promoter company.
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