Shares of Abbott India rose 5 percent in early trade on May 10 as investors rejoiced in the company's strong performance in the January-March quarter. Meanwhile, the company also rolled out its highest-ever dividend payout, which attracted a flurry of investors to lap up the stock.
At 09.17 am, shares of Abbott India were trading at Rs 26,419.20 on the NSE.
The drugmaker's board approved a dividend of Rs 410 per share for FY24. Remarkably, the company's net profit grew 26.5 percent in FY24, and its payout has also swelled at a similar magnitude during the fiscal.
Additionally, over the last five years, the company has seen its dividend payout outpace its profit growth. While net profit grew at a compounded rate of 22 percent between FY20 and FY24, the dividend per share (DPS) surged at a compound annual growth rate (CAGR) of 45 percent during the same period. This stands in contrast to the roughly 10 percent growth recorded in revenues over the same duration.
Aside from the dividend, the drugmaker's healthy Q4 earnings also worked for investors. The company reported better-than-expected net profit for the quarter gone by, up 24 percent on year to Rs 287 crore, and reported better-than-expected earnings for the March quarter. A Bloomberg consensus estimate had pegged a revenue of Rs 278 crore for the quarter.
The revenue for the quarter under review rose by 7.1 percent on year to Rs 1,439 crore. Revenue growth for the maker of the popular antacid Digene was tepid in the quarter due to the impact of pricing curbs following the inclusion of some of its medicines in the government’s essential medicines list in September 2023.
The company's operational performance also improved as the EBITDA margin expanded to 22.9 percent from 20.9 percent in the year-ago period.
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