Motilal Oswal has given Buy recommendation for Cadila Healthcare recommended buy rating on the stock with a target price of Rs 740 in its researc with a target price of Rs. 740 in its research report issued on May 28, 2021
Motilal Oswal’s research report on Cadila Healthcare
CDH delivered in line 4QFY21 earnings. Healthy traction in the Domestic Formulation (DF) and Consumer Wellness has offset the impact of weak US sales and improved EBITDA margin. It is well-placed to benefit from preventive as well as treatment drugs for COVID-19, in addition to improving performance in its core DF portfolio. The innovative pipeline is also progressing well in clinical studies.
We maintain our FY22E/FY23E EPS estimate. We continue to value CDH at 25x 12-month forward earnings to arrive at our TP of INR740. We remain positive on CDH on account of: a) superior execution in the DF segment, b) favorable demand for COVID-19 products, c) innovative as well as a Complex Generic pipeline (including injectables and transdermals), and c) reducing financial leverage. The vaccine-related upside is the potential trigger in the near term and is yet to be captured in earnings. Maintain Buy.