Prabhudas Lilladher recommended accumulate rating on Cadila Healthcare with a target price of Rs 371 in its research report dated November 05, 2018.
Prabhudas Lilladher's research report on Cadila Healthcare
The delay in launches of key generics in US and lower than expected growth in India formulations led to the underperformance of CDH in Q2FY19. CDH launched gAsacol HD and gToprol XL in mid-August FY19, while its sales from the exclusive generic of Lialda impacted due to foray of new generics in Q2FY19. The GST-led higher base of India formulations also impacted as it achieved flat growth YoY. Aided by forex benefits, other operating income and headline margins were higher. Ebitda margin was 23.2% vs estimates of 22.5%. CDH accounted Rs581m on forex benefits above Ebitda, of which Rs463m are included in other operating income. Total forex benefits above Ebitda were Rs1.3bn in H1FY19.
Outlook
Post price correction by 16% (since August FY19) as well as reduciton in earnings by 10% and 11% in FY19E and FY20E respectively, we maintain 'Accumulate' recommendation while reduce TP to Rs371 (from Rs437).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
