MOSL: CADILA HEALTHCARE (Buy)- Strong operating performance-key approvals awaited
Cadila Healthcare: Strong operating performance; key approvals awaited
(CDH IN, Mkt Cap USD6.4b, CMP INR405, TP INR500, 24% Upside, Buy)
- 3QFY18 revenue increased significantly by 41% YoY to INR32.6b (est. of INR31.3b). Gross margin improved ~440bp YoY to 65.5% (66% in 2QFY18). EBITDA more than doubled to INR8.4b (est. of INR8.1b), with the margin expanding ~830bp YoY to 25.8%. Improvement in the gross margin, along with a decrease in employee cost and other expenses by ~190bp (as % of sales) each, led to overall margin improvement. Strong revenue growth, coupled with margins improvement, led to robust growth in PAT by ~93% YoY to INR5.4b (est. of INR5.5b).
- Strong growth in the US driven by key launches: US business grew ~79% YoY to INR15.8b, led by Lialda/Tamiflu sales. Although Lialda sales are expected to decline due to new expected competition from Teva, the sales momentum should remain strong led by ramp-up of Tamiflu suspension and other key launches (such as Asacol HD, Toprol XL and Prevacid ODT). India business grew 16% YoY (~19% on a like-to-like basis). CDH expects domestic business to continue growing in double-digits.
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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