Cadila dips 2%; Credit Suisse downgrades, sees 19% downside

Credit Suisse has raised concerns about Cadila's Moraiya facility in Gujarat as it feels that the unit may not get clearance before the end of the fiscal year.

October 26, 2015 / 14:46 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Moneycontrol Bureau

Shares of Cadila Healthcare slipped over 2 percent intraday on Monday after Credit Suisse downgraded it to underperform from neutral. The brokerage sees a 19 percent downside on expensive valuations and pricing in upside from the clearance of the Moraiya facility.

Credit Suisse has raised concerns about Cadila's Moraiya facility in Gujarat as it feels that the unit may not get clearance before the end of the fiscal year. "Cadila had a face-to-face meeting with the FDA in 1Q16 and post that, it has been sending monthly updates. Given the time lapsed, it's possible in our view that the clearance of the facility may require a re-inspection in which case, the facility may not get clearance before the end of the fiscal year," it says in a note.

Credit Suisse also states that Cadila's US business was impacted in September quarter by the lack of approvals and the pricing impact of higher competition in HCQS. India sales growth in Q2 was weak at 10 percent year-on-year (despite strong ramp-up in sovaldi sales) due to the impact of the pricing policy and supply issues. The pharma company posted 40.56 percent jump in consolidated net profit to Rs 390.91 in Q2. Its total income increased to Rs 2,483.19 crore in the period.

At 11:11 hrs Cadila Healthcare was quoting at Rs 432.70, down Rs 10.15, or 2.29 percent on the BSE.