Hold Cadila Healthcare; target of Rs 2105: KRChoksey

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26 Aug, 2025 12:21

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KRChoksey report on Cadila Healthcare"Cadila’s result was in line with our estimates. Net sales grew by 17.7% YoY to Rs. 2378Crs driven by improved traction in the US business. However domestic business is still struggling and showed growth of 9.9% YoY due to price decline in two products. Other operating income was high during the quarter as it includes consideration of USD10.5mn received by Zydus Pharma (US) on sale of 8 ANDAs which were financed by the company but were filed through partners. Total consideration is around USD 13.5mn out of which around USD 3mn will be received in next quarter. EBITDA after adjusting forex stood at Rs. 581Crs up by 56.5% YoY slightly above our estimates. EBITDA margin stood at 23.3% expanded by 520bps on account of higher than expected gross margins which expanded by 420bps YoY due to better product mix. Reported PAT stood at Rs. 353Crs up by 47.1% YoY. Company has changed the initial invoicing policy for supply of its products to its subsidiary companies. Consequently, there is one time impact on consolidated tax expense which is higher by Rs. 61.5Crs. After adjusting forex & onetime tax adjustment, APAT stood at Rs. 399crs up by 69.5% YoY in line with our estimates. AEPS for the quarter stood at Rs 19.5"Valuation:"At CMP of Rs. 2004 the stock is trading at 27.5xFY16E & 21.9xFY17E EPS. Going ahead, we believe domestic business to recover & US business to continue to show strong growth on back of niche launches. We maintain our rating to ‘HOLD’ with the revised target price of Rs. 2105 at 23xFY17E EPS", says KRChoksey research report.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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