Prabhudas Lilladher recommended accumulate rating on Cadila Healthcare with a target price of Rs 362 in its research report dated February 07, 2019.
Prabhudas Lilladher's research report on Cadila Healthcare
With the launches of 15 generics and authorized generics (AG) of gAndrogel in US, the sales, EBITDA and PAT grew by 21%, 22% and 22% QoQ respectively. The major contribution of AG products in the incremental sales however decreased adj. gross margin by 360bps QoQ, while control over overhead costs increased adj. EBITDA margin by 200bps QoQ. A major revamp in India formulation business including rationalized product portfolio, reallocation of assets/reps and re-allotment of sales territory helped to control employee costs and SGA expenses. Also R&D cost was lower and may go up with more number of clinical trials of complex drugs in FY20E.
We roll forward our base to FY21E with new TP of Rs362 (on PE 16x of FY21E earnings).
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