Zydus Lifesciences Ltd. share price target

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...

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)...