Reliance Securities
Cadila Healthcare (Buy)
CMP: ₹363.9
Target: ₹450
Cadila Healthcare is an Indian pharmaceutical company headquartered at Ahmedabad in Gujarat State of western India. The company is the fourth largest pharmaceutical company in India, with ₹5,470-crore revenue. It is a significant manufacturer of generic drugs.
Cadila Healthcare (CDH) is one of the largest domestic pharma companies in India with a strong focus on niche segment in the
US market.
We believe that CDH’s long-term fundamentals continue to remain intact on the back of rich pending product pipeline (including high-value products in the US). Looking ahead, we expect CDH’s US business to clock 10 per cent CAGR over FY18-20E led by new launches (50+ products in FY19E).
We expect CDH’s domestic business to clock 14 per cent CAGR over FY18-20E led by new launches. It launched 64 new roducts in FY18.
We expect CDH’s sales and net profit to clock 12 per cent CAGR through FY18-20E.
We maintain our ‘buy’ recommendation on the stock with a target price of ₹450, valuing the stock at 20x FY20E EPS of ₹22.5.