ICICI Securities has maintained its 'Buy' rating on Pfizer, though it lowered the price target to ₹4,800 from ₹6,000. While the company reported strong Q2 FY27 revenue, profit was boosted by a one-time gain from discontinuing a key brand.
ICICI Securities has kept its 'Buy' recommendation on pharmaceutical company Pfizer Limited but lowered its target price to ₹4,800. This downward adjustment follows the brokerage's decision to apply a more conservative valuation multiple of 24 times projected earnings, compared to the 28 times used in previous assessments.
Pfizer’s recent performance shows a mix of steady operational growth and specific one-time events. For the second quarter of the 2027 fiscal year, the company reported revenue of ₹726.86 crore, a 13.2% increase compared to the same period last year. Net profit stood at ₹313.25 crore, representing a 65.7% rise year-on-year. Investors should note that this profit figure includes a one-time exceptional gain of ₹132.06 crore linked to the discontinuation of its Minipress XL brand.
The decision to halt sales of Minipress XL in India was part of a global manufacturing move by the parent company. While this discontinuation affects the product portfolio, the company continues to see growth in other core brands such as Magnex and Eliquis. Additionally, the launch of the Prevenar 20 vaccine is gaining traction, which the management expects will contribute to revenue in the coming quarters.
Despite the revenue growth, the company faced pressure on profitability. Gross margins contracted by 541 basis points year-on-year, primarily due to an unfavorable product mix where lower-margin products represented a larger share of sales. Pfizer managed to offset some of this impact by exercising strict control over operating and employee-related expenses. The company also maintains a strong liquidity position, closing the first half of the fiscal year with cash and equivalents amounting to ₹31.7 billion, which offers a cushion against operational uncertainties.
Looking ahead, the long-term performance of the company will depend on its ability to navigate sector-specific challenges. Investors may monitor how effectively the company introduces new products to replace lost revenue from legacy brands. Additionally, the pharmaceutical sector remains subject to regulatory pricing constraints, specifically under the National List of Essential Medicines, which can limit the company’s ability to adjust prices for its portfolio. The ability to manage these regulatory pressures while maintaining operational efficiency remains a key point for shareholders to track.