Motilal Oswal is bullish on Cadila Health has recommended buy rating on the stock with a target price of Rs 430 in its research report dated November 04, 2018.
Motilal Oswal's research report on Cadila Health
CDH's revenue declined ~8% YoY to INR29.6b (our estimate: INR30.4b) in 2QFY19, largely led by de-growth in US business (-20% YoY) and flat growth in domestic formulation (DF) business. Gross margin expanded by ~50bp YoY/QoQ to 66.5%. EBITDA margin contracted by ~320bp (+100bp QoQ) to 23.2% due to higher employee expense (+340bp as % of sales) and other expenditure (+260bp). PAT declined ~17% YoY to INR4.2b (in-line). For 1HFY19, sales stood at INR56.1b (+6% YoY), EBITDA at INR13.3b (+17% YoY) and PAT at INR8.8b (+37% YoY).
We remain positive on CDH, considering its robust ANDA pipeline for US market, minimal regulatory hurdles, and outperformance versus industry in DF market. Maintain Buy.
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