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Cadila Healthcare Ltd Research Report - 21st May 2016

Pharmaceutical | Published on May 21st 2016

IT

For 4QFY2016, Cadila Healthcare (Cadila) posted a robust performance on the net profit front while sales came in lower than expected. Sales came in at Rs2,376cr (V/s Rs2,400cr expected), growing by 5.7% yoy. On the operating front, the OPM came in at 21.4% V/s 21.1% expected and V/s 20.2% in 4QFY2015. The expansion in the OPM was driven by expansion in the GPM to 65.4% (V/s 64.3% in 4QFY2015) despite increase in staff expenditure and other expenditure by 13.7% yoy 3.8% yoy respectively. R&D expenditure during the quarter came in at 7.6% V/s 8.4% of sales in 4QFY2015. The Adj. net profit came in at Rs388cr V/s Rs373cr expected and V/s Rs351cr in 4QFY2015, ie a yoy growth of 10.6%. We maintain our Buy on the stock. Results better than expected at the net profit level: For 4QFY2016, sales came in at Rs2,342cr (V/s Rs2,400cr expected), growing by 5.7% yoy. On the operating front, the OPM came in at 21.4% V/s 21.1% expected and V/s 20.2% in 4QFY2015. The expansion in the OPM was driven by expansion in the GPM to 65.4% (V/s 64.3% in 4QFY2015) and despite 13.7% yoy growth in the staff expenditure and 3.8% yoy rise in other expenditure. R&D expenditure during the quarter came in at 7.6% V/s 8.4% of sales in 4QFY2015. The Adj. net profit came in at Rs388cr V/s Rs351cr in 4QFY2015, a yoy growth of 10.6%. Outlook and valuation: We expect Cadila’s net sales to post a 17.8% CAGR to Rs13,148cr and EPS to report a 15.8% CAGR to Rs20.0 over FY2016–18E. We maintain our Buy rating on the stock.

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CMP 325
Target Price 400
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)40,463.43
MCAP NSE (Rs in Cr)40,519.73
P/E (x)27.48
EPS (Rs.)14.38
BV (Rs.)64.16
Div Yield (%)0.81
FV (Rs.)1.00
P/BV (x)6.17
EV/Sales (x)4.31
EV/EBITDA (x)17.79

Shareholding Pattern (%)

Promoter75.0
Foreign10.0
Institution7.0
Public & Others6.0
Corporate2.0
Grand Total100.0

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