Zydus Lifesciences Ltd. share price target

Cadila's Q2 EBITDA (+67% YoY, 22% above our estimate) was driven by gLialda (~USD 80-90 mn in our view) in US. EBITDA margin was up 520 bps YoY/1,405 bps QoQ at 26.5% on positive operating leverage, as India sales also grew 9% YoY. PAT at Rs 5.03 bn was in line with estimates on higher tax expense..

Domestic Biz Recovers; US Biz to See Strong Traction Led by strong recovery in domestic formulations business and robust performance in the US business, Cadila Healthcare (CDH) has delivered a better-than-expected performance in terms of sales and EBITDA in 2QFY18. While its revenues came in at Rs32.3bn vs. our estimate of Rs 28.9bn, EBITDA stood at Rs8.6bn vs. our estimate of Rs 7.5bn. PAT at Rs5.0bn missed our estimate of Rs 5.4bn due to higher interest cost and tax rate. EBITDA margin came in at 26.5% vs. 21.9% in 2QFY17 and 12.6% in 1QFY18 led by launch of gLialda in the US and strong recovery in domestic business. CDH's US business grew by 71% YoY and 70% QoQ growth (in...

EBITDA margins improved 503 bps to 26.5% (I-direct estimate: 26.0%), mainly due to gLialda launch under exclusivity. EBITDA increased 66% YoY to | 857 crore (I-direct estimate: | 799 crore) PAT increased 32% YoY to | 503 crore (I-direct estimate: | 609 crore) due to the strong operational performance, which was partly offset by higher tax rate (29.8% vs | 14.8% in Q2FY17) US momentum improves with Moraiya EIR, expansion of other facilities The US (41% of revenues) has grown at a CAGR of 25% in FY13-17...

Maintain BUY with a revised TP of Rs 540 (24x on Sep-19E). Cadila (CDH) capitalised on strong tailwinds (sales of gLialda under exclusivity and channel-restocking in the domestic business), delivering stellar numbers in 2QFY18. The top-line came in at Rs 32.3bn, up 37% YoY and slightly ahead of estimates. EBITDA was Rs 8.6bn, up 66% YoY. The margin was 26.5%, up ~460bps YoY and ~190bps ahead of estimates, driven by sales of gLialda and operating leverage. PAT was Rs 5bn, up 49% YoY, slightly below estimates owing to a higher-than-anticipated tax outgo (~30%).

While the Gross margins have risen to 65.1% Vs 63.9% in Q2FY17, given the strong launches it looked a bit muted. EBITDA margins were at 24.7% We reduce our FY18E/19E estimates and TP (Rs505, 22x FY19E EPS). Key Highlights and Investment Rationale...

attributed to strong growth in the US and a recovery in domestic business sales. PAT rose 49% YoY to INR5b (5% beat). Strong growth in US driven by key launches: US business rose 66% YoY (+70% QoQ) to INR16.4b, led by Lialda launch. Lialda sales are likely to decline due to AG launch, but ramp-up of Tamiflu suspension and other key launches (incl. Asacol HD, Toprol XL, Prevacid ODT) should help maintain strong growth. Post successful resolution of Moraiya facility, we expect ~80 ANDA approvals until FY19 for CDH. ~50% of these are expected to come...

Cadila Healthcare posted poor set of numbers for 1QFY2018. Sales came in at `2,136cr (`2,216cr expected) v/s. `2,500cr in 1QFY2017, a yoy de-growth of 3.6%, mainly driven by the dip in sales of Indian formulations. Indian formulation sales registered (`637cr) a yoy dip of 18.9%. Its key market USA registered (`965cr), 13.8% yoy growth. On..

Q1FY18 EBITDA margin declined 1,000 bps YoY/ 590 bps QoQ to 12.4% on negative operating leverage, as India sales declined 19% YoY. EBITDA margin adj. for GST stood at ~18%. US sales grew 3% QoQ in USD terms aided by full quarter consolidation of Sentynl.

Cadila results were below our estimates, sales were at Rs21.4bn (est. Rs25.4bn) taking into account higher than expected de-stocking on account of GST implementation. Management guided the EBITDA margins at 18% for Q1FY18 post adjustment of GST impact at the similar levels as of Q4FY17. PAT was at Rs1.4bn 66% down YoY and 64.7% down QoQ. While the Gross margins have fallen from 65.1% in Q1FY17 to 61.2% in Q1FY18, which were lower than our estimates as we had accounted for some gLialda inventory push during the quarter. However, with the management guiding the...