Cadila -Beats estimate on back of superior US growth :: ICICI Securities, report link

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Beats estimate on back of superior US growth
• Revenues grew 20.7% to | 2108 crore, above I-direct estimate of
| 2027.6 crore on the back of US formulations business growth of
68% to | 802 crore. Indian formulations growth, on the other hand,
was muted at 9% to | 681 crore
• EBITDA margins improved 510 bps to 20% on a lower base, also
ahead of I-direct estimates of 18.5%. The EBITDA grew 61.6% YoY to
| 421 crore against I-direct expectation of | 375 crore
• PAT grew 51.6% YoY to | 278.09 crore vs. I-direct estimate of | 248.6
crore boosted mainly by higher sales growth and margins

US main growth catalyst followed by India; maintain HOLD
There was a growing apprehension earlier regarding the quality of
earning as despite stronger US traction, the margins remained below
20%, suggesting that incremental US growth was emanating from low
margin authorised generics (AG). However, the Q2 numbers
demonstrated stronger US growth as did the margins due to incremental
traction in the own products as out of the four launches in the US only
one was AG. This augurs well for the company as this will improve the
overall margins scenario given that the US contribution in overall
revenues is at an all-time high. Indian formulations are also likely to
support upbeat margins. Most of the other sub-segments, however,
continue to languish and struggle to provide meaningful visibility. Our
new target price stands at | 1538, based on 17x FY17E EPS of | 90.5 as
we roll forward our estimates to incorporate FY17 numbers. We maintain
HOLD owing to a sharp run-up in the stock recently.


LINK
http://content.icicidirect.com/mailimages/IDirect_CadilaHealthcare_Q2FY15.pdf