MOSL: CADILA HEALTH (Buy)-High base leads earnings decline-Outlook stable despite regulatory woes
Cadila Health: High base leads earnings decline; Outlook stable despite regulatory woes
(CDH IN, Mkt Cap USD3.9b, CMP INR264, TP INR345, 31% Upside, Buy)
- Sales at INR37.3b (our est. INR34.9b) were up 15% YoY, largely led by the addition of the Consumer Wellness business (sales at INR4b v/s INR1.3b YoY). US sales at INR18b were up 9.3% YoY. EM formulation sales grew 7% YoY to INR2b. Animal Health business grew 11% YoY to INR1.3b. India sales were muted, growing 2% YoY to INR9b for the quarter.
- Gross margin stood at 62.9% and contracted 380bp YoY on high base of past year. EBITDA margin at 21.4%, contracted 540bp YoY, largely due to change in product mix and higher other expenses as % of sales (+130bp YoY). Absolute EBITDA at INR8b (our est. INR7.2b) was down 8% YoY. PAT came in at INR4.6b (our est. INR3.9b), down 24% YoY. In FY19, sales/EBITDA/PAT stood at INR131b/INR30b/INR18.7b up 10%/5%/4% YoY.
Cadila Healthcare Limited is an India-based pharmaceutical company. The Company's subsidiaries include Zydus Wellness Limited, Windlas Healthcare Pvt Ltd, Liva Pharmaceuticals Limited, Biochem Pharmaceutical Industries Limited, Zydus Technologies Limited, German Remedies Limited, Dialforhealth India Limited, Dialforhealth Unity Limited and Dialforhealth Greencross Limited, among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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