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Margins decline due to lower domestic revenues and price impact on key products: Cadila's revenues increased by 15.3% on a YoY basis to Rs 37.3 bn (our estimate of Rs 38.1 bn) during the quarter.

Healthcare (Cadila) reported 14.8% growth in total operating revenue to Rs. 3,732.8 crore (above estimate due to consolidation of the acquired business of Heinz India Pvt. Ltd. for two months). Operating profit declined by 8% to Rs. 800.4 crore (5% below estimate) and OPM declined by 533.8 BPS to 21.4% (estimated 23.2%). Adjusted profit declined by 19.5% to Rs. 479.2 crore (8.5% below...

Gross margin stood at 62.9% and contracted 380bp YoY on high base of past year. EBITDA margin at 21.4%, contracted 540bp YoY, largely due to change in product mix and higher other expenses as % of sales (+130bp YoY). Absolute EBITDA at INR8b (our est. INR7.2b) was down 8% YoY. PAT came in at INR4.6b (our est. INR3.9b), down 24% YoY. In FY19, sales/EBITDA/PAT stood at INR131b/INR30b/INR18.7b up 10%/5%/4% YoY. Key Con-call highlights: (a) Despite high base of FY19 witnessed in US sales, CDH guided to maintain business to remain at similar levels (USD900m) in...

Robust US sales; high debt remains a concern Cadila Healthcare (Cadila) is India's leading vertically integrated pharmaceutical company. With its presence across the value chain, it manufactures finished dosage forms, active pharmaceutical...

Maintain BUY rating with a TP of Rs 465 (22x Dec-20E EPS). Cadila (CDH) reported a bumper quarter in 3QFY19 with revenue at Rs 35.9bn, up 11/23% YoY/QoQ (12% beat). Seasonality in the US and several launches over the last 6 months were the key reasons. Although EBITDA margin at 24.2% was up 257bps QoQ (155bps miss) on account of higher operating leverage in the US, there was a 300bps drop in gross margin due to higher AG sales.

ICICI Securities Ltd | Retail Equity Research Q3FY19 results were stronger-than-expected on all fronts due to strong US growth. Revenues grew 9.8% YoY to | 3578 crore (I-direct estimate: | 3222 crore) due to 22.1%, 46.5% YoY, QoQ growth in the US to | 1934 crore (I-direct estimate: | 1563.4 crore) EBITDA margins contracted 234 bps to 23.5% (I-direct estimate: 23.3%), due to an adverse product mix. EBITDA remained flat at | 840 crore but higher than I-direct estimate of | 750.7 crore...

Margins decline on lower domestic revenues and Androgel Ag: Cadila's revenues increased by 9.8% on a YoY basis to Rs 35.8 bn (our estimate ofRs 35.4 bn) during the quarter. Operating margins increased to 23.5% (lower than our estimates of 25.4%) compared to 26.3% in Q3FY19 due to lower gross margins, higher staff cost and R & D expenses.

7 February 2019 Cadila Healthcares (CDH) revenue grew ~10% YoY to INR35.8b (v/s our est. of INR31b), largely led by 22% YoY growth in the US business (55% of sales) and strong ~84% YoY growth in Emerging Markets (~6% of sales). This was partially offset by ~8% YoY decline in domestic business domestic formulations (DF) (~24% of sales). Gross margin declined by ~340bp YoY and ~430bp QoQ to 62.2%, mainly due to change in the product mix and lower DF sales. EBITDA margin also contracted by ~250bp due to lower GM and higher R&D; spend (up ~100bp YoY as % of sales), which was partially offset by lower other expense (~220bp). Absolute EBITDA remained flat YoY at INR8.4b (v/s est. PAT declined by ~6% YoY to INR5.1b (v/s est. of INR4.2b) due to higher interest cost. For 9MFY19, sales stood at INR94.

Profits aided by better margins: Cadila's revenues decreased by 8.1% on a YoY basis to Rs 29.6bn (our estimateof Rs 29.8 bn) during the quarter. Operating margins increased to 23.2% (higher than our estimates of 21.1%) compared to 26.5% in Q2FY19 due to lower revenues, higher staff cost and other expenses.

Cadila's (CDH) Q2FY19 results were below our expectations. Sales/EBITDA/PAT were at Rs28.4bn/Rs5.7bn/Rs4.2bnn respectively. EBITDA margins were at 20.1% Vs. our estimates of 23.9% due to 1) lower off-take of Tamiflu given 7 players, 2) shift of AG to own ANDA in gAsacol not picked up in margins as the refection of only 1 month and 3) overall 2% QoQ price erosion in the US business. We expect domestic growth to be...