Prabhudas Lilladher's research report on Cadila Healthcare
1QFY21 revenue was in-line with our estimate but EBITDA and EBITDAM were beat due to decline of SG&A 17% YoY. We believe its foray into COVID related products has diverted its focus from core business when its top revenue contributors (India, US Gx) have been lacking consistency. With HCQ already no longer preferred for COVID treatment and multiple players in Remdesivir, its ambitious COVID vaccine project might also be disappointing as world class innovators are far ahead in the race. We also believe its investment in specialty products may not be as rewarding as expected by management.
Hence we change our rating to SELL (earlier Reduce) but retain our TP of Rs329 based on 18x PE of FY22E.
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