Abbott India doles out three-fourths of its profit as dividend since FY20

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Drug maker Abbott India announced its highest ever divided of ₹410 per share for the financial year 2024. The declared dividend is 73% of its full year profit, which stood at ₹1,201 crore. The net profit of Abbott India increased by 26.5% in FY24, whereas its payout also swelled at similar magnitude during the year.

Interestingly, the company had distributed 90% of its profit as dividend in FY20 and 85% in FY21, taking the average payout since FY20 to a handsome 79%.

However, over the last five years, the dividend payout of the company has outpaced its profit growth. While the net profit grew at a compounded rate of 22% between FY20-FY24, the dividend per share (DPS) grew at a compound annual growth rate (CAGR) of 45% during the same period. That compares with close to 10% growth recorded in revenues during the same period.

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While the company announced same dividends of ₹275 per share in both FY21 and FY22, it further upped the payout by ₹50 to ₹325 in FY23 and again by ₹85 in FY24. To be sure, the DPS includes both final and special dividend declared in a given financial year. The company has been announcing special dividends in every year since FY18.

Abbott India, a unit of Abbott Laboratories has been trying to mitigate the impact of pricing curbs due to inclusion of some of its medicine in the government’s essential medicines list in September 2022. The company has been pushing up sales while containing its expenses.

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The maker of the popular antacid medicine Digene on Thursday reported better-than-expected earnings for the March quarter. Its net profit for the quarter came in at ₹287 crore, up 24% year-on-year. A Bloomberg consensus estimates had pegged a profit of ₹278 crore for the quarter. The revenue for the three months ended March 2024 increased by 7.1% to ₹1,439 crore.

Ahead of the March quarter results, shares of Abbott India closed 1.4% lower at 25,562.40 on the NSE. The stock of the company has rallied as much as 12% so far in 2024 against a marginal gain clocked by the Nifty50. The benchmark index is up just 1% since January this year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow