▪ Novo’s oral semaglutide Rybelsus is growing at a robust 173% CAGR over a 3Y period to Rs 4bn, as on MAT MAY’25
▪ Abbott’s in-licensed Insulin sales as on MAT MAY’25 — Mixtard Rs 7.6bn, Ryzodeg Rs 6bn, Novomix Rs 3.6bn, Actrapid Rs 2.3bn
▪ Due to sustenance of healthy return ratio and margin increment, we ascribe a higher PE of 48x (earlier 43x) on FY27 EPS of Rs 836
Novo Nordisk to market Wegovy independently: Novo Nordisk recently launched the global block buster drug Wegovy in Indian market. Wegovy is a weekly penbased injectable launched in 5 strengths (0.25 mg, 0.5mg, 1mg, 1.75 mg, 2.4mg), ranging from Rs 4-6k per dose per week. It is launched in competition with Eli Lilly’s Mounjaro that is launched in 2 strengths (2.5mg/5mg). Novo Nordisk’s management has decided to market Wegovy independently without relying on partner to capitalise on the growing demand, until the market opens in March’26.
Penfill insulin phase-out to uplift margins: Abbott India (BOOT IN) distributes Novo’s insulin portfolio in the Indian market. Novo Nordisk has decided to replace pen-based insulin with pen-based injectables to cater to the growing demand for GLP products. Novo Nordisk has also decided to distribute Wegovy on its launch. We estimate Novo’s pen-based insulin portfolio sales worth Rs 15bn in FY25 with a single-digit margin. Phasing out of Mixtard and lack of Wegovy’s distribution to aid in Abbott’s core margin (~38-39%); which will likely reflect in the company level EBITDA margin. We expect Abbott’s EBITDA margin to increase to ~32% in FY26E and ~34% in FY27E.
Industry-high productivity: Abbott’s core portfolio productivity is the highest in the industry — at Rs 12.5mn per MR from 3,250 MRs. We expect further ramp-up in productivity through new product expansion, tapping more indicators, penetrating through newer geographies and price hikes. We expect core portfolio’s productivity to increase to Rs 14.5mn by FY27E from 3500 MRs.
Our view: We believe BOOT is immune from the US tariff woes. In-licensed penbased insulin portfolio going off the market and Novo Nordisk distributing Wegovy on its own — are the key events for BOOT that would aid in reporting the highest-ever EBITDA margin of above 30%. Abbott launches 8-10 new products every year, which results in incurring no major capex. Thus, the ROCE of 45% would be sustainable (highest in the industry). Due to the sustenance of healthy return ratio and margin increment, we ascribe a higher PE of 48x (earlier 43x) in line with its peer GSK on FY27 EPS of Rs 836, to arrive at TP of Rs 40,128 (earlier Rs 35,292).
