Buy Cadila Healthcare; target of Rs 420: ICICI Direct

ICICI Direct is bullish on Cadila Healthcare has recommended buy rating on the stock with a target price of Rs 420 in its research report dated June 22, 2020.

Broker Research

June 23, 2020 / 18:12 IST

26 Aug, 2025 12:21

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ICICI Direct's research report on Cadila Healthcare

Q4 revenues stayed flat YoY at Rs 3752 crore (I-direct estimate: Rs 4099 crore) due to high base of AndroGel AG and Covid-19 related disruptions. Consolidation of Craft portfolio in wellness segment, which grew 21.8% YoY to Rs 490 crore was offset by 17.1% YoY fall in Emerging markets to Rs 172 crore. US sales fell 1.9% YoY to Rs 1761 crore. Domestic formulations also de-grew 1.1% YoY to Rs 892 crore. EBITDA margins contracted 36 bps YoY to 21.1% (I-direct estimate: 19.5%) as higher gross margins were offset by increase in employee and other expenses. Subsequently, EBITDA de-grew 1.1% YoY to Rs 791.2 crore (I-direct estimate: Rs 799.4 crore). Adjusted PAT de-grew 5.8% YoY to Rs 433.5 crore (I-direct estimate: Rs 467.2 crore). Delta vis-à-vis EBITDA was mainly due to higher depreciation.

Outlook

Overall, the balance sheet reduction, Moraiya warning letter resolution and US base business performance in tough times are some important aspects to watch. We arrive at our target price of Rs 420 based on 20x FY22E EPS of Rs 20.9.