​​​
  1. ‘Overweight’ on Cadila Healthcare

‘Overweight’ on Cadila Healthcare

Cadila reported strong sales of R2,420 crore , up 10.9% y-o-y (down 1.3% q-o-q), mainly driven by US (up 19.6% y-o-y, 6.8% q-o-q), India (up 11.1% y-o-y, down 5.1% q-o-q) and other operating income of R86.60 crore (R69.80 crore last four quarter average).

By: | Published: February 9, 2016 12:48 AM

Cadila reported strong sales of R2,420 crore , up 10.9% y-o-y (down 1.3% q-o-q), mainly driven by US (up 19.6% y-o-y, 6.8% q-o-q), India (up 11.1% y-o-y, down 5.1% q-o-q) and other operating income of R86.60 crore (R69.80 crore last four quarter average). OPM expanded by 3.4 ppts y-o-y (contracted 1.4 ppts q-o-q) to 23.8% due to revenue mix, FX translation gains (R200 million) and absorbed higher R&D costs (9.8% vs. 7% in Q216).

All this, along with higher other income of R255 million, led to net income of R3.9 billion (up 38.2% y-o-y, flat q-o-q). Gross debt and net debt were at R24 billion and R13.8 billion by end of Q3FY16.

We expect base business to remain muted over next 2-3 quarters until the visibility of niche site transfers improve.

We are overweight on CADI in view of strong F18 growth driven by the US launches, IPR build up (bio-similars, lip aglyn) and reasonable valuations.

Potential Import Alert at Moraiya site is a risk to our thesis, however CADI expects this to be mitigated (for current and future business) over the next 12 months through site transfers.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top