ICICI Direct has given Hold recommendation for Cadila Healthcare with a target price of Rs. 640 in its research report issued on May 28, 2021

ICICI Direct’s research report on Cadila Healthcare

Q4 revenues grew 2.5% YoY to Rs 3847 crore. Domestic formulations grew 14.7% YoY to Rs 1023 crore. US sales fell 14.3% YoY to Rs 1509 crore. Wellness segment grew a robust 22.1% YoY to Rs 598 crore. Emerging markets grew 45.5% YoY to Rs 250 crore. API segment grew 19.9% YoY to Rs 140 crore. Animal health segment grew 25.2% YoY to Rs 150 crore. EBITDA margins expanded 115 bps YoY to 22.2% mainly due to lower other expenditure partly offset by lower gross margins. Subsequently, EBITDA grew 8.1% YoY to Rs 855 crore. Reported PAT grew 73.3% YoY to Rs 679 crore. Delta vis-à-vis EBITDA was mainly due to DTA related adjustments taken in the quarter.

Outlook

We maintain HOLD and arrive at our TP of Rs 640 (unchanged) based on base business value of Rs 544 (22x FY23E EPS of Rs 24.7) + NPV of ~Rs 96 for vaccine and gRevlimid opportunity.

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