Zydus Lifesciences Ltd. share price target

Maintain BUY with a revised TP of Rs 590 (24x on June19E). With GST impeding sales in the domestic segment, Cadilas (CDH) 1Q performance was uninspiring. The top-line came down by 4% YoY, EBITDA margin shrunk ~1000bps YoY to 12.6% and earnings plummeted ~61% YoY to Rs 1.3bn. On the positive side, the US business held its ground and remained flat QoQ. Growth was 14%YoY.

Cadila has received approval for its generic version of Lialda(Mesalaminedelayed release tablets) in the US (market size of USD 1.15 bn as per IMS)from its Moraiya facility. We expect this to be meaningful limited competition contributor (USD 130-140 mn in FY18/19 sales with ~80-85% gross margin)

Most awaited approvals start to roll out, giving us confidence in the future pipeline getting launched. After getting a green chit from US FDA for the Moraiya facility, and first approval of Levofloxacin injection was received on June 2, post which Cadila received FTF of gLialda...

Cadila's (CDH) Q4 revenue at Rs 25.2 bn (up 6% YoY) and EBITDA at Rs 4.6 bn (down 16% YoY) were in line with estimates. PAT at Rs 3.85 bn was aided by higher other income and lower tax expense.

For 4QFY2017, Cadila Healthcare posted lower than expected results. The sales came in at `2,418cr (v/s. `2,800cr expected) v/s. `2,270cr in 4QFY2016, a yoy growth of 6.5%. On the operating front, the EBITDA margin came in at 16.7% v/s. 21.4% (v/s. 15.7% expected) in 4QFY2016. The GPMs came in at 61.6% (v/s. 65.7% in 4QFY2016), which resu..

Revenues grew 6% YoY at | 2525 crore (I-direct estimate: | 2559 crore) mainly due to strong growth in LatAm, APIs and animal health business. Domestic formulations grew 3% YoY to | 798 crore (Idirect estimate: | 867 crore). US sales declined 8% YoY to | 888 crore (I-direct estimate: | 1003 crore) EBITDA margins declined 469 bps to 18.4% (I-direct estimate: 17.9%), mainly due to lower gross margins PAT declined 32% YoY at | 386 crore (I-direct estimates: | 275 crore)...

Cadilas (CDH) 4Q performance was unimpressive, with EBITDA margin declining ~389bps YoY to 19.8% and earnings dipping ~32% YoY to Rs 3.8bn.

For 3QFY2017, Cadila Healthcare posted lower than expected results with sales at Rs2,250cr (v/s. Rs2,800cr expected) v/s. Rs2,268cr in 3QFY2016, a yoy degrowth of 0.8%. The dip in sales was on the back of the US (Rs886.9cr, a yoy dip of 17.2%). On the operating front, the EBITDA margin came in at 15.2% (v/s. 22.1% expected) v/s. 22.0% in ..

Cadila Healthcare's Moraiya facility, which was under the USFDA warning letter for the last few quarters, was re-inspected by the agency during February 6-15, 2017. Post inspection, the USFDA has not issued any Form 483 observations, thus giving clearance to the facility. This indicates the company will get an establishment inspection report (EIR) soon. The...

Revenue decreased by 3.71% to Rs. 2249.6 Cr in Q3FY17 when compared to the previous quarter. Also, it decreased by 0.81% when compared with Q3FY16