Cadila Healthcare, which derives an equal proportion of revenues from domestic and global markets, continued its robust performance in the third quarter ended December. On a year-on-year basis, while gross consolidated total income grew 18 per cent to Rs 1,166.81, net profits grew faster by 25 per cent to Rs 162 crore.
The formulation exports business got a boost as revenues from the US markets at Rs 237 crore, surged 33 per cent on a year-on-year basis on the back of four new product launches and existing products gaining market share. Exports to Brazil, too, recorded 33 per cent growth, while revenues from Japan surged 22 per cent to Rs 11 crore, with two new product launches. Analysts anticipate the traction in the international revenues to continue. IIFL reports had estimated a 60 per cent compounded annual growth rate in the US revenues over FY07-11.
European sales, however, declined 15 per cent to Rs 88 crore with a dip in Clopidogrel (a drug that inhibits blood clotting) supplies and a depreciating Euro. However, the company has stepped up efforts and filed four more dossiers for new launches in the European markets, thus taking its total tally to 102.
| HEALTHY GOING | |||
| In Rs cr | Q3FY11 | % chg y-o-y | FY11E |
| Net sales | 1,167 | 17.7 | 4,374 |
| Ebitda | 256 | 22.1 | 972 |
| Net profit | 162 | 24.9 | 673 |
| EPS (Rs) | 7.9 | 25.0 | 32.8 |
| E: Consensus estimates Source: Company, Bloomberg | |||
On the CRAMS front, the Nycomed joint venture (JV) sales of Rs 15 crore in the December quarter surged over 103 per cent year-on-year. The company is well on the track to commence supplying 14 active pharmaceutical ingredients (APIs) – eight under the Nycomed JV and six under Cadila – by end-June 2011, reports suggest.
In the domestic formulations business, strong growth continued with net sales growth up 17 per cent to Rs 559 crore as against Rs 479 crore in the year ago quarter. Cadila launched nine new products, including line extensions and Ostigard 100, the first Indian launch during the quarter. The management had in the past, guided for 15 per cent growth of this business in 2010-11 aided 45 new products launches. Analysts at Motilal Oswal Securities believe a ramp-up in the growth of this business is imperative to support Cadila's initiatives in other markets as it is a high cash generating business.
Overall, backed by new product launches and strong growth in domestic and international markets, most analysts remain positive on the company’s prospects. The stock, at Rs 832.20, trades at 27.1 and 22.2 times 2010-11 and 2011-12 earnings estimates by Motilal Oswal Securities, not including the upside from recent supply agreement with Abbott.
