Accumulate Cadila Healthcare; target of Rs 436: KR Choksey

KR Choksey has recommended accumulate rating on Cadila Healthcare with a target price of Rs 436 in its research report dated February 09, 2018.

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February 15, 2018 / 02:01 IST

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KR Choksey's research report on Cadila Healthcare

Cadila posted revenue of INR 32,596 Mn with growth of 37.9% Y-o-Y and 48% Q-o-Q. The company had 180 days exclusivity of gLialda which has an estimated market size of USD 1.1 mn. Cadila has also launched Tamiflu in the quarter which boosted the US business of the company. The company expects 4% price erosion in its base portfolio which will be subdued by new launches.

Outlook

We believe that going ahead, the sales of the company will spurt on the back of launch of 10-12 new products per quarter which will lead to reduction of gap between approval and launch timeline. We expect the domestic business to grow by 15% and US formulations business to grow by 8%. We believe that that the speciality and the consumer wellness business of the company will scale up leading to higher profitability. At CMP of INR 403, we value the stock at 24.5x FY19E EPS of INR 17.8 and recommend “ACCUMULATE” rating on the stock with the target price of INR 436, with potential upside of 8.2% from CMP.For all recommendations report, click here

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