For 1QFY2017, the company posted lower than expected results. The company
posted sales of Rs2,216cr V/s Rs2,607cr expected and V/s Rs2,267cr in 1QFY2016,
a yoy de-growth of 2.2%. On the operating front, the EBITDA margin came in at
20.4% V/s 20.9% expected and V/s 20.3% in 1QFY2016. The dip in the OPM
was saved in spite of an underperformance on the sales front as the GPM
improved to 65.1% V/s 64.8% in 1QFY2016. The Adj. net profit came in at
Rs356cr V/s Rs489cr expected and V/s Rs462cr in 1QFY2016, a yoy de-growth of
22.9%. We maintain our accumulate rating.
Results lower than expected: Company posted sales of Rs2,216cr V/s Rs2,607cr
expected and V/s Rs2,267cr in 1QFY2016, a yoy de-growth of 2.2%. The dip in
sales was owing to the USA business (Rs848.3cr) posting a yoy dip of 13.9%. On
the operating front, the EBITDA margin came in at 20.4% V/s 20.9% expected
and V/s 20.3% in 1QFY2016. The dip in the OPM was saved in spite of an
underperformance on the sales front as the GPM improved to 65.1% V/s 64.8%
in 1QFY2016. The Adj. net profit came in at Rs356cr V/s Rs489cr expected and V/s
Rs462cr in 1QFY2016, a yoy de-growth of 22.9%.
Outlook and valuation: We expect Cadila’s net sales to post a 17.8% CAGR to
Rs13,148cr and EPS to report a 15.8% CAGR to Rs20.0 over FY2016–18E. We
maintain our accumulate rating on the stock.
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