Views on Cadila Healthcare 3QFY2014 results - Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP-Research-Pharma, Angel Broking) on Cadila Healthcare 3QFY2014 results:

"Cadila Healthcare 3QFY2014, results came above expectations on the net profit. On the Top-line, the company posted sales of Rs. 1838cr V/s expectation of Rs. 1,781cr, registering a yoy growth of 17.7%. The growth was mainly lead by exports, which grew by 38.5% yoy, while domestic sales grew by 3.8% yoy. The domestic sales, was impacted on back of the 3.4% yoy formulation sales growth. The exports growth was mainly driven by the US markets, which grew by 61.1% yoy and emerging markets, which grew by 30.1%. Other key market Europe, posted a yoy growth of 6.0% yoy.

The, company's OPM came in at 14.2% V/s 16.0% expected and expanding by 64bps. The expansion in the OPM came in inspite of the lower gross margins which collapsed by 4.7% yoy, was on back of a very low rise in the employee and other expenses during the quarter. The employee expenses rose by 12.8% yoy, while the other expenditure rose by 7.4% yoy. Also the R&D expenses, during the quarter, came in at 6.7% V/s 9.0% during the last corresponding period. The Net profit growth came in at Rs. 185.7cr V/s Rs. 167cr expected, registering a growth of 82% yoy on back of lower tax outgo and reduction in the interest expenses. We maintain our neutral rating on the stock."

Cadila Healthcare (CMP: Rs. 855/TP:-/Upside:-)

Source : Equity Bulls

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