Hold Cadila Healthcare; target of Rs 358: Geojit
Geojit’s research report on Cadila Healthcare
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 ingredients, animal healthcare products and wellness products. Revenue rose by 10% YoY in Q3FY19 led by robust performance of US formulation business and improved Emerging market and API business. Indian formulation sales disappointed with 8% YoY decline impacted by rationalization of product portfolio and resources.
Highly leveraged balance sheet post Heinz India acquisition, which was funded largely through debt, remain a near term concern. Hence, we change our rating to ‘HOLD’ from ‘BUY’ on the stock with a revised rollover target price of Rs 358 based on 18xFY21E EPS.
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