Multi Baggers
Zydus Life
BSE ID : 532321 NSE ID : ZYDUSLIFE
RECOMMENDED PRICE 1798.95
PEAK FROM RECO 673.70 -62.55%
CURRENT PRICE 919.55 Resource id #18
Cadila Healthcare is a fully integrated, global healthcare provider, with strengths all along the pharmaceutical value chain. We initiate a 'BUY' on the stock with a target price of Rs 2150 with the medium to long term investment horizon.
Cadila Healthcare
Cadila Healthcare is a fully integrated, global healthcare provider, with strengths all along the pharmaceutical value chain. With a core competence in the field of healthcare, Zydus Cadila provides total healthcare solutions ranging from formulations, active pharmaceutical ingredients and animal healthcare products to wellness products.
The company has registered decent results for the quarter ending March 2015. The revenues from operations on consolidated basis grew by about 16% to Rs.2288 crores vs. Rs.1968 cr. in the year ago quarter while it grew ~4% q-o-q. Operating profit climbed sharply by 38.3% at Rs.495.87 crores as against Rs.358.55 crores in the previous year quarter. The adjusted net profit stood at Rs.348.95 crore for the quarter as against Rs.252.87 crore; registering a sharp growth of 38%. There has been sharp improvement on the margins front with operating margin expanding about 260 bps at 21.80% y-o-y while net profit margin surged 240 bps at 15.25%.
US business posted sales of Rs.33.9 billion, up by 56% during the year. Indian formulations business posted sales of Rs.26.8 billion, up by 9%. Latin America posted sales of Rs.2.3 billion. European business posted sales of Rs.3.4 billion during the year. Emerging markets business grew by 14% and posted sales of Rs.4 billion. Amongst other business, Zydus Wellness Lt. posted sales of Rs.4.4 billion, up by 3%. Animal health business posted sales of Rs.3.1 billion, up by 12% with healthy margins. API business posted a growth of 6% at sales of Rs.3.7 billion.
Valuation
With strong traction in the key US market, robust product pipeline and approvals thereby, product launches and increasing global presence are the key growth drivers for Cadila Healthcare. We believe the company is trading at an attractive valuation at 25.13x and 20.16x of FY16EPS of Rs.71.58 and FY17EPS of Rs.89.23. We initiate a 'BUY' on the stock with a target price of Rs 2150 (appreciation of about 20%) with the medium to long term investment horizon.
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Disclosure of Interest Statement - Company Name
1. Analyst Ownership of the Stock - No
2. Hem & its Group Company Ownership of the Stock - Yes
3. Hem & its Group Companies' Director Ownership of the Stock - Yes
4. Broking relationship with company covered - No
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CadilaHealthcare_HemSec_PYTMultibagger.pdf
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