Cadila Stock Jumps To Highest In Nearly Three Years After Q2 Results
Finished tablets cascade down the channels of a packaging machine during the manufacture of the Favipiravir antiviral medicine at a plant in Khimki, Russia. (Photographer: Andrey Rudakov/Bloomberg)

Cadila Stock Jumps To Highest In Nearly Three Years After Q2 Results

Shares of Cadila Healthcare Ltd. jumped to the highest in nearly three years after the drugmaker reported a fourfold jump in quarterly net profit on a rise in sales in all key markets, including the U.S. and India, rose, and market share gains across therapies.

Net profit stood at Rs 473.4 crore in the quarter ended September compared with Rs 107.2 crore a year ago, according to an exchange filing. That compares with the Rs 429-crore consensus estimate of analysts tracked by Bloomberg.

The beat came despite an exceptional loss of Rs 132 crore in the reported quarter due to premium on non-convertible debentures after their purchase by the group.

  • Revenue rose 13.4% over the year earlier to Rs 3,820 crore. Analysts had pegged the top line at Rs 3,661 crore
  • Operating profit, or earnings before interest, tax, depreciation and amortisation, rose 35.8% to Rs 863.4 crore, compared with the estimated Rs 765 crore
  • Ebitda margin expanded to 22.6% from 18.9% a year ago, against 20.9% forecast

Growth, according to the company’s post-earnings statement, was aided by market share gains in gynaecology, pain management, anti-infectives, anti-diabetic and hormones portfolio during the July-September period.

Cadila is also building a pipeline of high-entry-barrier products in four areas:

  • Novel research with four molecules in the pipeline
  • Biologics — with a pipeline of 21 products for India and emerging markets, where the management expects two key approvals in six-nine months.
  • Vaccines, and complex generics / injectables with 69 products in the pipeline.

The company is targeting $150-200 million of revenue by FY24 from injectables in the U.S., CLSA analysts Alok Dalal and Surajdev Yadav said in a post-earnings note. The research firm maintained its 'buy' rating on the stock and raised its price target to Rs 540 from Rs 525.

Shares of Cadila gained as much as 10% to Rs 451.7 apiece—the highest since January 2018. That compares with a 1.01% gain in the Nifty 50.

Other Highlights

  • India business revenue rose 11% to Rs 1,583 crore.
  • U.S. business revenue up 18% to Rs 1,709 crore.
  • Business in emerging markets of Asia, Africa and Latin America grew 12% in constant currency terms.
  • The company managed to reduce its net debt by Rs 2,709 crore in the first half of FY21. Current net debt at Rs 4,031 crore from Rs 6,740 crore on March 31, 2020.
  • Will be completing the pre-clinical development on ZYIL 1, for management of critically ill Covid-19 patients.
  • Phase II clinical trials of Desidustat in the management of Covid-19 is underway in Mexico.
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