JPMorgan has downgraded Abbott India Ltd. to 'neutral' from 'overweight' and cut its target price to ₹27,500 per share from the previous ₹34,000. According to reports from CNBC TV18, the brokerage cited growth challenges as the primary reason for the downgrade. The stock's valuation is considered reasonable but the growth outlook doesn't justify its premium, leading to a reduced target multiple of 30 times from 37 times one-year forward earnings. This downgrade reflects broader market concerns about the pharmaceutical sector's growth trajectory and strategic execution challenges.
JPMorgan highlighted several factors weighing on Abbott India's growth prospects. As reported by CNBC TV18, the company faces limited new launches, Mixtard phase-out and GLP-1 impact that will negatively affect its growth trajectory. Additionally, frequent MD resignations raise strategic uncertainty for the pharmaceutical company. The brokerage noted that these challenges have resulted in a lower target multiple due to growth challenges. These operational headwinds continue to pressure the company's near-term growth prospects and market positioning.
Despite the negative rating action, Abbott India shares gained 1.2% on Wednesday at ₹26,025, according to CNBC TV18. The stock is currently down close to 10% so far in 2026. Among the eight analysts covering the stock, six have a 'buy' rating, one each have 'hold' and 'sell' ratings. This mixed analyst sentiment reflects the market's cautious approach to the company's near-term prospects, with investors weighing the company's operational challenges against its potential for recovery.
In a positive development, Abbott India announced in February a partnership with Novo Nordisk to market a new brand of semaglutide in India, as reported by CNBC TV18. The company will commercialise the drug under the brand 'Extensior' in India, targeting the growing demand for advanced metabolic treatments. This strategic alliance could provide future growth opportunities despite current challenges, though the company's ability to capitalize on this partnership will depend on resolving its operational and strategic uncertainties.
