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India Equity Research Reports, IPO and Stock News
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Investment Rationale
§ Cadlila Healthcare emerges our top pick given its strong growth prospects (30% earnings CAGR over FY10-
13E), wide geographical reach and foray into difficult to manufacture generics such as transdermal patches, biosimilar
and vaccines.
§ Expect international business to grow at a CAGR of 28% over FY10-12E
§ US likely to witness 8-10 ANDA launches in FY12E and FY13E each
§ 3 products slated to get introduced in US and 6 in Europe over the next 18 months (includes recently approved
Taxotere (Docetaxel, US$1.2bn market))
§ Clarity on niche product filings in the US generic market could provide a positive upside and lead to expansion in
valuation multiple
§ Hospira ramp-up to allay concerns around Nycomed JV (expect Rs2550mn contribution from Hospira in FY12E).
Cadila currently has supply agreement for 6 Oncology products with Hospira.
§ Aiming to attain revenue of US$3bn by 2016
§ Healthy return ratios (RoE> 30%)
Valuations
§ We expect an earnings CAGR of 30% over FY10-12E
§ At CMP, the stock is trading at 25x/ 19x/ 15x, FY11E/ FY12E/ FY13E EPS of Rs31.3/ Rs40/ Rs51.6 respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Investment Rationale
§ Cadlila Healthcare emerges our top pick given its strong growth prospects (30% earnings CAGR over FY10-
13E), wide geographical reach and foray into difficult to manufacture generics such as transdermal patches, biosimilar
and vaccines.
§ Expect international business to grow at a CAGR of 28% over FY10-12E
§ US likely to witness 8-10 ANDA launches in FY12E and FY13E each
§ 3 products slated to get introduced in US and 6 in Europe over the next 18 months (includes recently approved
Taxotere (Docetaxel, US$1.2bn market))
§ Clarity on niche product filings in the US generic market could provide a positive upside and lead to expansion in
valuation multiple
§ Hospira ramp-up to allay concerns around Nycomed JV (expect Rs2550mn contribution from Hospira in FY12E).
Cadila currently has supply agreement for 6 Oncology products with Hospira.
§ Aiming to attain revenue of US$3bn by 2016
§ Healthy return ratios (RoE> 30%)
Valuations
§ We expect an earnings CAGR of 30% over FY10-12E
§ At CMP, the stock is trading at 25x/ 19x/ 15x, FY11E/ FY12E/ FY13E EPS of Rs31.3/ Rs40/ Rs51.6 respectively.
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