Hi @OmkarT:
Since management remains tight lipped on disclosures around margins, mathematical modelling remains difficult. However, bigger picture (Established+branded+suitable promoter+self-sustaining+ sharing cash flow with shareholders+Miniscule Capex/R&D+No gap b/w reported NI and CF++++possibility of YoY growth for many-many years due to nature of the product and Indian demographics—>>>Above all CEO change seems to be a non-event for this business) thinking places it in compounder category.
My thoughts are as below:
- Net Income growth compared to sales should maintain the past trend in the near term (2~3 Yrs) since margin expansion possibility still exists because weight of the low gross margin sales (Insulin trading) will shrink compared to weight of the higher margin (core) business [Refer Page-18 https://www.abbott.co.in/content/dam/corp/abbott/en-ind/investors/Transcript-of-Investors-Meet-September-28-2022.pdf].
- Sales growth may improve as management is looking to become $1 billion organization in the years to come [Refer Page-3 of the above].
- Basis past financial prudence, net Cashflow and net Income should remain in sync.
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