Zydus Lifesciences Ltd. share price target

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,...

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.

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...

26 May 2017 Cadilas (CDH) 4QFY18 revenue increased significantly by 31% YoY to INR32.5b (est. Gross margin improved ~410bp YoY to 66.7% (65.5% in 3QFY18). EBITDA rose ~88% YoY to INR8.7b (est. of INR7.3b), with margin expansion of ~810bp YoY to 26.8%. Improvement in the gross margin, along with a decrease in employee cost by ~100bp (as % of sales) and in R&D; cost by ~340bp, led to overall margin improvement. Strong revenue growth, coupled with better margins, led to robust ~57% YoY growth in PAT to INR6.1b (est.

Robust US and India formulations business boosts revenue Cadila reported 41% YoY increase in revenue led by growth in US and Indian formulation business. India formulation business recorded 15% YoY growth in revenue in Q3FY18 supported by new launches. The company launched 12 new products in India including line extensions in Q3FY18. Accounting for GST adjustments, like to like growth stood at ~19% YoY. Revenue from LatAm and Emerging market rose by 15% and 6% YoY, respectively while EU sales declined by 1% YoY. Animal Health segment grew by robust 18.3% YoY. We expect domestic business to register 11% CAGR over FY17-20E driven by new launches....

ff India Biz (29% of Sales): CDH launched 12 new products in India. Though it recovered 80% of lost sales post GST-led disruptions, overall inventory days are still below the pre-GST level. Notably, the Company has received marketing authorisation from DCGI for typhoid vaccine. ff FY18 Guidance: Expecting R&D; spend at 7% of sales for FY18E, CDH envisages tax rate of 25% in FY18E and 20-22% in FY19E owing to lower tax in the US. Further, the Management...