Buy Cadila Healthcare; target of Rs 356: KRChoksey

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26 Aug, 2025 12:21

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KRChoksey's research report on Cadila HealthcareCadila has received EIR (Establishment Inspection Report) from US FDA for its Baddi manufacturing facility after a successful inspection from the authorities. Cadila's Moraiya facility, which constitutes ~60% of Cadila’s US formulation sales (24% contribution to overall revenues), was served with a warning letter in Dec-2015. Moraiya facility is a key facility with majority of Cadila's ANDA filings (~75+ pending ANDAs from the total 159 pending ANDA's) including transdermal and nasal filings. The management has initiated site transfer for some of its key products and near term launches including Asacol HD and Prevacid ODT from Moraiya to Baddi and Ahmedabad SEZ (which was approved recently by US FDA in Q2FY16).We expect revenues to show CAGR of 15.5% over FY15-17E owing to traction in US business on account of elevated approvals from its Baddi and SEZ facility and domestic resurgence on several launches leading to improvement in margins & return ratios. As of now, resolution of Moraiya facility is the key focus of the management, which we expect will come online within the next 15-18 months. We expect company to post RoE & RoCE at around 28% & 26.2% by FY17E. At CMP of INR 317 the stock trades at 21.2xFY16E & 17.8xFY17E EPS. We have an Accumulate rating on the stock given recent price correction and value the company at 20x FY17E EPS of INR 17.8 to arrive at a Target Price of INR 356.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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