Angel Broking neutral on Cadila Healthcare

Angel Broking's report on Cadila Healthcare

Cadila Healthcare’s 3QFY2015 results came in much higher than estimated. Sales growth for 3QFY2015 came in at 17.5% yoy, to end the period at Rs 2,160cr V/s Rs 2,080cr expected and V/s Rs 1,838cr in 3QFY2014.On the operating front, the OPM came in at 19.3% V/s 15.8% expected and 14.2% in 3QFY2014, a yoy expansion of 510bp. Thus, the adj. net profit came in at Rs 278cr V/s Rs 248cr expected and V/s Rs 189cr in 3QFY2014, a yoy growth of 47.2%.

Cadila Healthcare’s 3QFY2015 results came in much higher than estimated. Sales growth for 3QFY2015 came in at 17.5% yoy, to end the period at Rs 2,160cr V/s Rs 2,080cr expected and V/s Rs 1,838cr in 3QFY2014, driven by exports.On the operating front, the OPM came in at 19.3% V/s 15.8% expected and 14.2% in 3QFY2014, a yoy expansion of 510bp. The GPM, came in at 64.8% V/s 60.8%, which along with a 1% yoy rise in other expenditure, aided the OPM expansion, in spite of the 52.6% yoy rise in the R&D expenses along with 21.1% yoy rise in the employee expenditure. R&D expenditure during the quarter stood at 8.7% of sales V/s 6.7% of sales in 3QFY2015.Thus, the adj. net profit came in at Rs 278cr V/s Rs 248cr expected and V/s Rs 189cr in 3QFY2014, a yoy growth of 47.2%.

Outlook and valuation: "We expect Cadila’s net sales to post a 20.1% CAGR to Rs 10,176cr and EPS to report a 26.8% CAGR to Rs 64.3 over FY2014–16E. We maintain our Neutral rating on the stock", says Angel Broking research report.

Read More