Fundamentals

PFIZER 

Ticker : 500680
BUY: Rs 2670
Target: Rs 2895 

It is a pharmaceutical company having portfolio of 140 products across over 15 therapeutic areas. The top 10 brands of the company contribute more than 50 per cent towards the total revenue. On the financial front, the revenue in FY18 was flattish due to discontinuation of some of its brands and Corex cough syrup. However, due to better operating efficiency, the EBITDA margins rose from 17.8 per cent in FY17 to 25.4 per cent in FY18. The PAT for the year was up by 7.1 per cent YoY. It is a debt-free company with high return ratios like ROE of 31 per cent in FY18. The company is focusing on launching new products and acquiring new brands to diversify its portfolio. Also, it has maintained healthy dividend payout ratio of 30.5 per cent. Thus, we recommend investors to BUY the scrip.

 

HDFC STANDARD LIFE INSURANCE CO. 

Ticker : 540777
BUY: Rs 489
Target: Rs 547 

HDFC Life is a life insurance company providing various individual and group insurance solutions across India. In the June quarter, the total premium grew by 37 per cent YoY, while the profit increased by 20 per cent YoY. Regarding the premium growth, the individual APE grew by 15 per cent YoY and the overall APE increased by 26 per cent YoY. During the quarter, the company covered 10 million lives as against 5.7 million lives in Q1FY18. The company expects the share of protection to go up over the next 2-3 years. It has delivered average ROE of more than 25 per cent over FY15- 17 and is expected to improve further due to growth in new business segment. The insurance sector is highly under-penetrated and has bright prospects in the near term. Considering these factors, we recommend it as a BUY