Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cadila Healthcare (CDH)
Pharmaceuticals
Weak quarter as expected, warning letter resolution is key stock trigger. 2QFY12
was a soft quarter as expected with PAT ex-forex flat yoy, 3% below our estimates
marked by poor growth in India of 7%. While US surprised with strong organic growth
of 26%, most other geographies disappointed with muted growth leading to poor
organic growth of 8%. We reduce our FY2012/13E EPS by 8/4% due to lower sales
growth in Europe, emerging markets, API and forex loss. While we factor in 20%
organic sales growth in US in FY2013E, this is contingent on resolution of warning
letter, which remains the key stock trigger in near term. Maintain REDUCE (unchanged)
with PT at Rs860 (was Rs900), 20X FY2013E EPS of Rs43 (was Rs45).
Sales growth at 10.5%, organic growth at 8%; US grew strongly, all other regions disappoint
Reported sales growth was poor at 10% with organic growth at 8% (Rs225 mn from Nesher and
Rs84 mn from Bremer) versus our estimate of 17% with all regions except US disappointing. US
organic sales growth at 26% was higher than our estimate of 20% while Nesher acquisition
added sales of US$5 mn (2 months sales) in line with guidance of annual sales of US$30 mn. Key
export markets of emerging markets, Europe and API where hit by (1) destocking by clients, (2)
price erosion, (3) cutting supplies to protect receivables and (4) macro concerns. This trend which
is expected to continue particularly in API and emerging markets along with slower growth in
consumer segment due to increasing competition leads to our revision in sales growth estimates
for FY2012-13E. India sales growth at 7% was lower than our estimate of 12% and we estimate
FY2012-13E sales growth at 10-15%.
EBITDA margin adjusted for forex at 20.5%, up qoq; PAT ex-forex is flat yoy
While sales growth was poor at 10.5%, same as that seen in 1QFY12, EBITDA margin adjusted for
forex (not in our estimates) increased 100 bps qoq to 20.5%, 80 bps above our estimate due to
strict control on other expenses. PAT adjusted for total forex loss of Rs900 mn in 2QFY11 ((1)
Rs510 mn reported in interest cost on account of forex translational loss on forex loans of US$165
mn, (2) Rs300 mn in other expenses and (3) Rs90 mn in other income on account of translational
loss on forward contracts and realized losses, was at Rs1.8 bn, flat yoy, 3% below our estimates.
We reduce our FY2012-13E estimate by 8/4%
We reduce our FY2012-13E EPS by 8/4% due to slower growth in Europe, emerging markets, API
which is expected to continue as outlined by management. We factor in 22-20% organic growth
in US in FY2012-13E. However, this is contingent on warning letter resolution which remains the
key stock trigger. In absence of this resolution, we see 4% downside to our FY2013E EPS of Rs43.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cadila Healthcare (CDH)
Pharmaceuticals
Weak quarter as expected, warning letter resolution is key stock trigger. 2QFY12
was a soft quarter as expected with PAT ex-forex flat yoy, 3% below our estimates
marked by poor growth in India of 7%. While US surprised with strong organic growth
of 26%, most other geographies disappointed with muted growth leading to poor
organic growth of 8%. We reduce our FY2012/13E EPS by 8/4% due to lower sales
growth in Europe, emerging markets, API and forex loss. While we factor in 20%
organic sales growth in US in FY2013E, this is contingent on resolution of warning
letter, which remains the key stock trigger in near term. Maintain REDUCE (unchanged)
with PT at Rs860 (was Rs900), 20X FY2013E EPS of Rs43 (was Rs45).
Sales growth at 10.5%, organic growth at 8%; US grew strongly, all other regions disappoint
Reported sales growth was poor at 10% with organic growth at 8% (Rs225 mn from Nesher and
Rs84 mn from Bremer) versus our estimate of 17% with all regions except US disappointing. US
organic sales growth at 26% was higher than our estimate of 20% while Nesher acquisition
added sales of US$5 mn (2 months sales) in line with guidance of annual sales of US$30 mn. Key
export markets of emerging markets, Europe and API where hit by (1) destocking by clients, (2)
price erosion, (3) cutting supplies to protect receivables and (4) macro concerns. This trend which
is expected to continue particularly in API and emerging markets along with slower growth in
consumer segment due to increasing competition leads to our revision in sales growth estimates
for FY2012-13E. India sales growth at 7% was lower than our estimate of 12% and we estimate
FY2012-13E sales growth at 10-15%.
EBITDA margin adjusted for forex at 20.5%, up qoq; PAT ex-forex is flat yoy
While sales growth was poor at 10.5%, same as that seen in 1QFY12, EBITDA margin adjusted for
forex (not in our estimates) increased 100 bps qoq to 20.5%, 80 bps above our estimate due to
strict control on other expenses. PAT adjusted for total forex loss of Rs900 mn in 2QFY11 ((1)
Rs510 mn reported in interest cost on account of forex translational loss on forex loans of US$165
mn, (2) Rs300 mn in other expenses and (3) Rs90 mn in other income on account of translational
loss on forward contracts and realized losses, was at Rs1.8 bn, flat yoy, 3% below our estimates.
We reduce our FY2012-13E estimate by 8/4%
We reduce our FY2012-13E EPS by 8/4% due to slower growth in Europe, emerging markets, API
which is expected to continue as outlined by management. We factor in 22-20% organic growth
in US in FY2012-13E. However, this is contingent on warning letter resolution which remains the
key stock trigger. In absence of this resolution, we see 4% downside to our FY2013E EPS of Rs43.
No comments:
Post a Comment