Zydus Lifesciences Ltd. share price target

Cadila reported a strong 3QFY16. A 335bps of QoQ improvement in EBITDA margin was driven by (1) 7% QoQ growth in the US, led by a few one-offs and HCQS, (2) Flat staff cost and (3) Other operating income of Rs 866mn (up 122% YoY). Higher R&D; (9.7% of sales) was offset by flat other expenses.

9 CDH management is optimistic about the quick resolution of Warning Letter on its Moraiyaplant.ItexpectcontinuedUSgrowthmomentumledbynewlaunchesfromits recentlyUSFDAapprovedalternateplantsatBaddiandAhmadabadSEZ....

quarters. Domestic formulation growth was at 10.5%. EBITDA margins saw 460bps expansion to 24.6% (higher than estimated 21.4%) on better business mix. There was 150bps/160bps margin surprise in materials/other expenses. Core PAT (adjusted for forex...

2Q led by currency and HCQS, approvals remain key ff Launches in niche therapies such as transdermals (expect 2 in FY17E), vaccines (expect few launches by FY17E in India), derma products commercialization over next 3 years (facility yet to be inspected by the USFDA) and a potential biologics...

The company has registered decent results for the quarter ending March 2015. The revenues from operations on consolidated basis grew by about 16% to Rs.2288 crores vs. Rs.1968 cr. in the year ago quarter while it grew 4% q-o-q. Operating profit climbed sharply by 38.3% at Rs.495.87 crores as against Rs.358.55 crores in the previous year...

Cadila's Q1FY16 performance was a bit below our expectations with EBITDA/earnings missingourestimatesby2%/6%(adjustedforforexgainofRs181mnandoneoffANDA disposal income of US$ 10.5mn). However, revenue performance was 4% better than...

Cadila's revenues grew by 22% YoY to Rs 25 bn (our estimate of Rs 24.2 bn) during the quarter on the back of strong performance in US region. Operating margins improved to 24.8% compared to 18.3% in Q1FY15, higher than our estimates of 21.5% due to better gross margins, lower staff cost and higher other operating income. Net Profit at Rs 3,534 mn in Q1FY16 grew by 47.1% YoY as compared to our estimate of Rs 3,399 mn.

ff Domestic formulations, wellness and US sales growth (ex HCQS and AGs) has been muted in the recent past. Management guided for mid-teen growth from 2Q onwards in India as systemic issues resolve. ff For US, management guided ~40 filings-50% in complex space, from Baddi, Moraiya and SEZ and expects to gain ~20 approvals in FY16E. Moraiya resolution remains imperative for Cadila in FY16E as it is key to approvals (Asacol HD, Abilify, Lailda, Nexium and Prevacid ODT). ff Cadila filed 1 ANDA from Nesher in 1Q. Nesher is engaged in a consent decree with...

and 33% beat to our estimated sales and profit, respectively. The key to the strong Q4 performance was robust 44% growth in US sales primarily supported by scarcity in Hydroxychloroquin that may not last long. Going ahead, the management guides for...