Cadila Healthcare (Cadila) is on the largest Pharmaceuticals player both in US & Indian markets. However, over the last few years, the company has been going through tough times both in USA & Indian markets. While the Indian formulation market has been under pressure on back of the pricing norms & GST implementation, USA market

Robust US sales; high debt remains a concern Cadila Healthcare (Cadila) is India's leading vertically integrated pharmaceutical company. With its presence across the value chain, it manufactures finished dosage forms, active pharmaceutical...

Maintain BUY rating with a TP of Rs 465 (22x Dec-20E EPS). Cadila (CDH) reported a bumper quarter in 3QFY19 with revenue at Rs 35.9bn, up 11/23% YoY/QoQ (12% beat). Seasonality in the US and several launches over the last 6 months were the key reasons. Although EBITDA margin at 24.2% was up 257bps QoQ (155bps miss) on account of higher operating leverage in the US, there was a 300bps drop in gross margin due to higher AG sales.

ICICI Securities Ltd | Retail Equity Research Q3FY19 results were stronger-than-expected on all fronts due to strong US growth. Revenues grew 9.8% YoY to | 3578 crore (I-direct estimate: | 3222 crore) due to 22.1%, 46.5% YoY, QoQ growth in the US to | 1934 crore (I-direct estimate: | 1563.4 crore) EBITDA margins contracted 234 bps to 23.5% (I-direct estimate: 23.3%), due to an adverse product mix. EBITDA remained flat at | 840 crore but higher than I-direct estimate of | 750.7 crore...

7 February 2019 Cadila Healthcares (CDH) revenue grew ~10% YoY to INR35.8b (v/s our est. of INR31b), largely led by 22% YoY growth in the US business (55% of sales) and strong ~84% YoY growth in Emerging Markets (~6% of sales). This was partially offset by ~8% YoY decline in domestic business domestic formulations (DF) (~24% of sales). Gross margin declined by ~340bp YoY and ~430bp QoQ to 62.2%, mainly due to change in the product mix and lower DF sales. EBITDA margin also contracted by ~250bp due to lower GM and higher R&D; spend (up ~100bp YoY as % of sales), which was partially offset by lower other expense (~220bp). Absolute EBITDA remained flat YoY at INR8.4b (v/s est. PAT declined by ~6% YoY to INR5.1b (v/s est. of INR4.2b) due to higher interest cost. For 9MFY19, sales stood at INR94.

Cadila's (CDH) Q2FY19 results were below our expectations. Sales/EBITDA/PAT were at Rs28.4bn/Rs5.7bn/Rs4.2bnn respectively. EBITDA margins were at 20.1% Vs. our estimates of 23.9% due to 1) lower off-take of Tamiflu given 7 players, 2) shift of AG to own ANDA in gAsacol not picked up in margins as the refection of only 1 month and 3) overall 2% QoQ price erosion in the US business. We expect domestic growth to be...

Maintain BUY with a revised TP of Rs 475 (22x Sep-20E EPS). Cadila (CDH) reported a muted quarter in 2QFY19 with revenue at Rs 29.6bn, down 8%YoY/ up 2%QoQ (in-line). Despite recovering 7%QoQ, the US business was down 20%YoY as it witnessed competition in gLialda. Margin at 23.2% was down 338bps YoY and up 94 bps QoQ (110bps miss) on account of higher forex loss at Rs 578mn (v/s Rs 135mn in 2QFY18) and increased R&D; spend of Rs 2.7bn, 9% of sales.

Q2FY19 results were stronger-than-expected on the operational front likely due to slower-than-expected price erosion in gLialda (ulcerative colitis). Revenues were in line with I-direct estimates Revenues de-grew 8.4% YoY to | 2961.2 crore (I-direct estimate: | 2986.6 crore) mainly due to high base of gLialda (ulcerative colitis), exclusivity in the US in Q2FY18 EBITDA margins contracted 323 bps to 23.2% (I-direct estimate: 20.5%), mainly on account of higher employee cost. EBITDA de-grew...

4 November 2018 CDHs revenue declined ~8% YoY to INR29.6b (our (-20% YoY) and flat growth in domestic formulation (DF) business. Gross margin expanded by ~50bp YoY/QoQ to 66.5%. EBITDA margin contracted by ~320bp (+100bp QoQ) to 23.2% due to higher employee expense (+340bp as % of sales) and other expenditure (+260bp). PAT declined ~17% YoY to INR4.2b (in-line). For 1HFY19, sales stood at INR56.1b (+6% YoY), EBITDA at INR13.3b (+17% YoY) and PAT at INR8.8b (+37% YoY). (1) CDH launched g-Asacol HD from its in-house manufacturing facility, which drove some improvement in margin. (2) CDH launched authorized generic version (AG) of g-Androgel in October 2018. (3) CDH has been able to maintain g-Lialda sales as competitor was not able to gain market share.

Revenue fell by 12.18% to Rs. 2768.7 Cr in Q1FY19 when compared to the previous quarter. Cadila Healthcare Ltd Q1FY19 results Comment

With a revised TP of 495 (24x on FY20E EPS), we maintain BUY. Cadila (CDH) continues to be at pace with double-digit YoY growth which started in 2QFY18. In 1QFY19, CDH reported revenue at Rs 28.9bn showing a growth of 32%YoY. EBITDA at Rs 6.4bn and PAT at Rs 4.6bn were up 133% and 233% YoY respectively. EBITDA margin came in at 22.3%, improving ~1000bpsYoY. This growth was primarily driven by the US and India businesses which were up 27% and 40% YoY respectively. Other major segments including LATAM and ROW markets and consumer wellness, animal health, and API businesses also saw double digit growth.

ff Acquisition: CDH has acquired 51% stake in Dehradun-based Windlas Healthcare, which gives access to a USFDA-approved facility (oral solid; plain vanilla and niche products). CDH expects this facility to help in commercialisation of 20-30 products over next 2-3 years,...

Cadila's (CDH) Q1FY19 results were mixed, sales were below by 3.4% while APAT was 9.8% above our expectations. We believe the miss at the margins were purely due to the erosion at gLialda and less off-take of Tamiflu. Sales grew by 29.6% YoY backed by strong growth in US formulations, India and LATAM regions. EBITDA margins were at 18.8% vs our estimates of 22% due to the sales mix. We expect domestic growth to be ahead of industry at 14-15%, while continuous launches in the US business to support growth. CDH plans to acquire 51% stake in Dehradunbased Windlas Healthcare Private Limited (WHPL) which will help ramp up the operations and increase our...

Revenues grew 29.8% YoY to | 2893.7 crore (I-direct estimate: | 3221.9 crore) due to 40.1% YoY growth in domestic formulations to | 893 crore (I-direct estimate: | 905 crore) and 27.5% growth in US revenues to | 1230 crore (I-direct estimate: | 1594.9 crore) EBITDA margins improved 985 bps to 22.3% (I-direct estimate: 21.5%), on account of gLialda exclusivity and base effect of GST...

Profits aided by Operating income and Other Income: Cadila's revenues increased by 29.5% on a YoY basis to Rs 28.9 bn (our estimate of Rs 29.8 bn) during the quarter. Key outperformer was US. Operatingmargins increased to 22.3% (lower than our estimates of 24.0%) compared to12.8% in Q1FY18 due to higher revenues, operating income and lower R & D.

grew 12% on the launches of new products launches and management guided for similar sustainable growth in near term. strong headwind in US however led to 39% QoQ lower sales in CRAMS sales with partners. Sales of emerging markets are also impacted due to depreciation of currencies. CDH's gross margin increased by 70bps QoQ due to higher India sales, while higher charge backs of core US sales and pull backs of authorized generics caused higher overheads and lower EBITDA margin by 570bps. Forex gains...

Margins Outperform: Cadila's revenues increased by 29.3% on a YoY basis to Rs 32.5 bn (our estimate of Rs 32.0 bn) during the quarter. Key outperformer was US. Operating margins increased to 27.6% (higher than our estimates of 23.3%) compared to 18.9% in Q4FY17 due to higher revenue, better gross margin and lower R & D.

Revenues grew 28.7% YoY to | 3250 crore (I-direct estimate: | 3204 crore) mainly due to 66.7% rise in US sales to | 1642 crore (I-direct estimate: | 1464 crore) led by gLialda (ulcerative colitis) exclusivity & favourable seasonality impact on gTamiflu (anti-infective) EBITDA margins improved 870 bps to 25.8% (I-direct estimate: 25.0%), due to limited competition launches in the US. EBITDA increased 87.7% YoY to | 870 crore (I-direct estimate: | 801 crore) PAT increased 58% YoY to | 607 crore (I-direct estimate: | 496 crore)...

Maintain BUY with a revised TP of Rs 525 (24x on FY20E EPS). Cadila (CDH) reported superlative numbers in 4QFY18. Top line grew 31%YoY; EBITDA margin was at 26.0% (up 623bps YoY) and reported PAT came in at Rs 6bn (up 57%YoY). The US revenues jumped 67%YoY, led by one-time sales of gLialda and gTamiflu under limited competition. The company has filed 26 products in FY18 and has 144 ANDAs pending with US FDA. Approval momentum continues to remain strong with 77 ANDA approvals received in FY18. However, CDH is yet to launch many of these products and has guided for 50+ launches in FY19 for the US market.

Strong Traction in US Biz to Continue; Maintain BUY Led by strong growth in US business, Cadila Healthcare (CDH) has delivered a better-thanexpected performance in 4QFY18 with its revenue growing by 31.8% YoY to Rs32.5bn. Its EBITDA grew by 87.4% to Rs8.7bn, while EBITDA margin expanded by ~795bps YoY to 26.8% due to better product-mix (gross margin up 409bps YoY) and 340bps YoY decline in R&D; cost to 5.6%. Despite higher depreciation/interest/tax cost and lower other income, PAT grew by 56.8% YoY to Rs6.1bn led by strong sales and operating performance. While its US business grew by 66.7% YoY to Rs16.4bn on the back of higher sales of gLialda and gTamiflu, India business witnessed a moderate 5.2% YoY growth led by weak growth in CVS and diabetes segment. Expecting...