Karvy Stock Broking has downgraded its rating on Cadila Healthcare to outperformer with a target of Rs 320 in its January 14, 2009. "Revenues for the quarter are expected to move up by 21.5 % to Rs 7041 million. Operating margins are expected to move up from 17.6 % to 18.3 %. The main reason has been savings in gross margins. Profits are expected to move up by 24 % to Rs 640 million. Commencement of Hospira venture and traction in international business are good long term drivers. We marginally upgrade our EPS estimates for FY 2009E and downgrade our FY 2010E estimates on back of lower gross margins by 2 % to Rs 26.6. We marginally downgrade our price target by 3 % to Rs 320 based on 12x FY 2010E. We downgrade the stock to Outperformer," says Karvy Stock Broking's research report.

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