Cadila Healthcare - Q3FY21 First Cut - ICICI Direct

(CMP: Rs. 482; MCap: Rs. 49329 crore)

Cadila Healthcare's Q3FY21 operational performance was mostly in-line with I-direct estimates (albeit skewed) led by strong domestic formulations growth, whereas profitability was higher due to lower interest cost and tax rate.

Q3FY21 Earnings Summary

- Revenues grew 4.3% YoY to Rs. 3796 crore (I-direct estimate: Rs. 3906 crore) with strong domestic formulations growth being partially offset by decline in US sales. Domestic formulations posted a strong growth of 21.2% YoY to Rs. 1104 crore (I-direct estimate: Rs. 1029 crore). However, US sales declined 4.3% YoY to Rs. 1603 crore (I-direct estimate: Rs. 1788 crore). Wellness segment also grew a robust 15.8% YoY to Rs. 376 crore (I-direct estimate: Rs. 350 crore). Emerging markets grew 10.9% YoY to Rs. 293 crore (I-direct estimate: Rs. 278 crore). API segment de-grew 18.8% YoY to 132 crore (I-direct estimate: Rs. 154 crore). Animal Health segment grew 17.0% YoY to 163 crore (I-direct estimate: Rs. 156 crore)

- EBITDA margins expanded 220 bps YoY to 21.3% (I-direct estimate: 21.2%) due to better overall operational performance. Subsequently, EBITDA grew 16.4% YoY to Rs. 807 crore (I-direct estimate: Rs. 828 crore)

- Adjusted Net Profit grew 40.5% YoY to Rs. 527 crore (I-direct estimates: Rs. 495 crore). Delta vis-à-vis EBITDA was mainly due to lower interest cost and higher other income

On the US front, the company's plan to venture into complex injectables is likely to provide meaningful traction from FY23-24 onwards. Similarly, addition of biosimilars (like Trastuzumab, Adalimumab, Pegfilgrastim, Bevacizumab, etc.) for Emerging markets (like LatAm, MENA markets and South East Asia) is expected to provide growth impetus, going ahead. The wellness segment performance hinges upon the company's marketing & distribution prowess besides effective product positioning. India formulations business, after recent restructuring, is likely to stabilise. Both wellness, India formulations are likely to deliver steady growth in FY22. Overall, balance sheet reduction, Moraiya warning letter resolution, US base business performance in tough times are some important aspects to watch.

We would be coming out with a detailed report post the conference call.

Shares of CADILA HEALTHCARE LTD. was last trading in BSE at Rs.475 as compared to the previous close of Rs. 479.15. The total number of shares traded during the day was 636638 in over 11616 trades.

The stock hit an intraday high of Rs. 488.85 and intraday low of 472. The net turnover during the day was Rs. 305738398.

Source : Equity Bulls

Keywords