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S l o w s t a r t …
Cadila Healthcare came out with a weak set of number for the quarter
ended June 2011. Total revenues grew 9.7% to | 1192 crore below our
expectation of | 1307 crore. The lower growth in sales was on account of
the cooling-off effect after hectic activities in FY11 in order to achieve the
US$1-billion revenue landmark, as cited by the management. EBITDA
margins declined 215 bps to ~21% due to an increase in employee & raw
material costs. The company has extended the out-licensing deal with
Abbott adding eight more products. As a result, it received licensing
income of | 44.6 crore. Net profit grew by 15.4% to | 229.8 crore.
Adjusting licensing income, the net profit stood at | 194 crore, in line with
our estimates of | 196.1 crore.
ƒ Receives warning letter from USFDA for injectable facility
USFDA has issued a warning letter to its injectable facility as the
company went for pre-approval inspection. There will not be any
impact on current financials as the company is not generating any
revenues from this facility. It expects to receive approval for this
facility in nine months post the corrective measures. It plans to
launch two injections from this facility in the US market in FY13.
ƒ Bayer Zydus JV commissions operations in May
The Bayer Zydus Pharma (50:50) JV has started commercial
operations in India during May. Current field force strength is
around 500, of which around 100 were transferred from Cadila.
V a l u a t i o n
The management maintains that Q1 numbers were a kind of aberration
and has maintained their FY15 revenue target of US$3 billion. Given their
track record and focus on multiple growth drivers and clean balance
sheet, we remain positive about Cadila’s prospects. We have revised our
FY12E and FY13E EPS estimates by -2% and 2.2% on the back of
consolidation of Nesher Pharmaceuticals and increase in field force. We
have valued the stock at | 953 based on 18x FY13E EPS of | 52.9 with a
HOLD rating. Existing shareholders who have bought the stock earlier on
our recommendation can continue to hold the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S l o w s t a r t …
Cadila Healthcare came out with a weak set of number for the quarter
ended June 2011. Total revenues grew 9.7% to | 1192 crore below our
expectation of | 1307 crore. The lower growth in sales was on account of
the cooling-off effect after hectic activities in FY11 in order to achieve the
US$1-billion revenue landmark, as cited by the management. EBITDA
margins declined 215 bps to ~21% due to an increase in employee & raw
material costs. The company has extended the out-licensing deal with
Abbott adding eight more products. As a result, it received licensing
income of | 44.6 crore. Net profit grew by 15.4% to | 229.8 crore.
Adjusting licensing income, the net profit stood at | 194 crore, in line with
our estimates of | 196.1 crore.
ƒ Receives warning letter from USFDA for injectable facility
USFDA has issued a warning letter to its injectable facility as the
company went for pre-approval inspection. There will not be any
impact on current financials as the company is not generating any
revenues from this facility. It expects to receive approval for this
facility in nine months post the corrective measures. It plans to
launch two injections from this facility in the US market in FY13.
ƒ Bayer Zydus JV commissions operations in May
The Bayer Zydus Pharma (50:50) JV has started commercial
operations in India during May. Current field force strength is
around 500, of which around 100 were transferred from Cadila.
V a l u a t i o n
The management maintains that Q1 numbers were a kind of aberration
and has maintained their FY15 revenue target of US$3 billion. Given their
track record and focus on multiple growth drivers and clean balance
sheet, we remain positive about Cadila’s prospects. We have revised our
FY12E and FY13E EPS estimates by -2% and 2.2% on the back of
consolidation of Nesher Pharmaceuticals and increase in field force. We
have valued the stock at | 953 based on 18x FY13E EPS of | 52.9 with a
HOLD rating. Existing shareholders who have bought the stock earlier on
our recommendation can continue to hold the stock.
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