Buy Cadila Healthcare; target of Rs 701: Dolat Capital Market

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

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26 Aug, 2025 12:21

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Cadila reported beat on the operating performance in 4Q as domestic formulations offset the subdued US (pricing pressure and lower offtake in Asacol HD). Revenue grew 4% YoY, an improved product mix (15% YoY growth in India formulations offset the US sales at $207mn, down $13mn QoQ) aided operating performance at 22% (our estimate 20%). Adjusted for write-off in Levarphanol and higher deferred tax, PAT grew 7% YoY at Rs4.4bn, in-line with expectation. Net debt halved to Rs35bn, with net debt/EBITDA at 0.8x, lowest in last 5 years. Management guided for sustenance in EBITDA margins over next 2 years; US to remain subdued in 1Q whereas; India to see higher sales from COVID n lower SGA spend.

However, due to lack of clarity on approval and pricing, we value the COVID portfolio as optionality. Maintain Buy with a target price of Rs700 (24x PE valuing the base business and Rs140 as optionality of R&D initiatives).

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