Moneycontrol PRO
Upcoming Event:Super25 3.0- India’s Largest Online Stock Traders Conference brought to you by Moneycontrol Pro & Espresso

Reduce Cadila Healthcare; target of Rs 408: Dolat Capital

Dolat Capital recommended accumulate rating on Cadila Healthcare with a target price of Rs 408 in its research report dated August 05, 2020.

November 27, 2020 / 01:35 PM IST

Dolat Capital's research report on Cadila Healthcare

Cadila’s Q1 results were higher than our estimates driven by lower opex. The 4% revenue beat was driven by higher API sales (HCQ) while India and US were in-line. As has been the trend in the sector, lower opex led to 340 bps beat in EBITDA margins at 22.4% (we saw 19%). Though US sales were lower US$28mn QoQ at US$215mn, higher contribution from Asacol HD aided gross margins at 65% coupled with currency benefit. In US business, we expect sales erosion in gAsacol HD to be more than offset by new launches including transdermals and injectables (guidance of 45 injectable launches in next 2-3 years, including partnered products). While site transfer to Liva facility (first site transfer product approved in May-20) should aid launches, clearance of WL for Moraiya facility is critical. It is in the process of filing complex injectables now which should start contributing from FY23/24 onwards. Injectables currently contribute sales of US$15mn and is expected to scale upto US$150-200mn by FY24E in the US. Cadila guided for net debt reduction of Rs10bn in FY21.


Maintain Reduce with a target price of Rs 408 (22x PE vs 20x earlier valuing the R&D initiatives).

For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Download your money calendar for 2022-23 here and keep your dates with your moneybox, investments, taxes

Broker Research
first published: Aug 9, 2020 09:16 pm
ISO 27001 - BSI Assurance Mark