Cadila Healthcare - Q2FY21 First Cut - ICICI Securities

(CMP: Rs. 410; MCap: Rs. 41989 crore)

Cadila Healthcares' Q2FY21 revenues were above I-direct estimates on all fronts due to better than expected operational performance and lower interest expense

Q2FY21 Earnings Summary

- Revenues grew 13.5% YoY to Rs. 3820 crore (I-direct estimate: Rs. 3567 crore) vs Rs. 3367 crore in Q2FY20. US sales grew a robust 18% YoY to Rs. 1709 crore (I-direct estimate: Rs. 1610 crore). Domestic formulations grew 11.2% YoY to Rs. 1087 crore (I-direct estimate: Rs. 958 crore). Wellness segment grew 5.7% YoY to Rs. 335 crore (I-direct estimate: Rs. 333 crore). Emerging markets grew 7.9% YoY to Rs. 236 crore (I-direct estimate: Rs. 252 crore). API segment grew 52.2% YoY to 160 crore (I-direct estimate: Rs. 126 crore). Animal Health segment grew 19.5% YoY to 161 crore (I-direct estimate: Rs. 135 crore)

- EBITDA margins expanded 402 bps YoY to 22.6% (I-direct estimate: 20.7%) due to lower employee and other expenses. Subsequently, EBITDA grew 38.0% YoY to Rs. 863 crore (I-direct estimate: Rs. 740 crore)

- Adjusting for exceptional items Net Profit grew 82.3% YoY to Rs. 578 crore (I-direct estimates: Rs. 400 crore). Delta vis-à-vis EBITDA was mainly due to lower interest cost

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.410.15 as compared to the previous close of Rs. 417.7. The total number of shares traded during the day was 167862 in over 2071 trades.

The stock hit an intraday high of Rs. 423 and intraday low of 405. The net turnover during the day was Rs. 69279761.

Source : Equity Bulls

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