Arihant Capital has given Accumulate recommendation for Cadila Healthcare with a target price of Rs. 678 in its research report issued on May 28, 2021
Arihant Capital’s research report on Cadila Healthcare
Cadila Healthcare operates as an integrated pharmaceutical company with business encompassing the value chain in the research, development, production, marketing and distribution of pharmaceutical products. The growth in FY21 of the company is mainly driven by strong performance of India business and innovated product portfolio. Cadila’s Q4FY21 revenue grew by 3% YoY to INR 3847 crs. The EBITDA margin of the company increased by 115bps YoY to 22.2% mainly due to better gross margins and reduced other expenses. The net profit for the quarter grew by 77% YoY and stood at INR 732 crs backed by recognition of deferred tax asset and MAT credits of earlier years.
At CMP we maintain our positive view on the stock. Stock is currently trading at 30x/28x its FY22E/23E earnings (EPS INR 20.6/FY22E, INR 22.6/FY23E). We recommend HOLD rating on the stock with a target price of INR 678 at 30x FY23E EPS.