Six Month Call
Cadila Healthcare
Current Market price: 317
Target 1: 430
Target 2: 462
Current Quote of Cadila Healthcare
Cadila's restructuring initiative on its domestic formulations (54% of business revenues) has started paying off and will enable momentum going ahead and its generics seeing less focus going forward. The company's revenue traction in US markets will be strong going forward. The company is confident of crossing USD 50 million revenues in the current year. The French business has finally turned profitable and got 11 site variations in the last quarter taking the total to 17 till date. The French business clocked operating profits of EUR 85000 for the first time.
Site variation will improve the viability of the French business. The Pantaprazole intermediate business will face decline from FY 09 with patent expiries across markets in CY 2009 and US patent expiry in CY10. The company's Zydus Mayne venture will kick off from April 2008 and would compensate the profits lost due to Altana venture. The international formulations business is also gaining traction with revenues going to grow by CAGR of 28 % in FY 07-09E to Rs 6.1 billion. The main drivers in this business is expected to US, French markets which will grow from Rs 1.4billion to Rs 2.4 billion and from Rs 1.26 billion to Rs 2.14 billion respectively by FY 09E. The API export business has also turned around and is expected to contribute going ahead.
Valuation
The traction in US, France and ROW formulations markets, API markets and branded formulations markets is firmly on track. Increased
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