Cadila Healthcare Ltd. is poised to leverage its research and development investments made over the last couple of years as challenges regarding approvals in the U.S. get resolved, brokerage IDFC Securities said while initiating coverage on the drugmaker.
Cadila received a final approval from the U.S. Food and Drug Administration to manufacture a colitis drug at its key Moraiya facility in Gujarat, the company said in a statement. Approval for 18 abbreviated new drug applications (ANDA) in the quarter ended June indicates a significant pick-up in the U.S. business, IDFC Securities said.
The brokerage expects Cadila's…
- U.S. sales to post a 25 percent compounded annual growth rate over the next two financial years to $884 million.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) to grow at 40 percent CAGR.
- Profit to jump 34 percent.
Any accelerated approvals for niche generics can provide an upside to our estimates.IDFC Securities
The brokerage anticipates Cadila to look for acquisitions to strengthen its U.S. specialty franchise.
The main factors for expected strong performance are likely to be the turnaround in the U.S. business and a better operational mix, said the brokerage. Recovery in domestic business and stabilising emerging markets currencies may support overall growth, IDFC Securities said.
IDFC Securities maintained an ‘Outperformer' rating on the stock with a price target of Rs 588.
Shares of Cadila Healthcare rose as much as 0.7 percent to Rs 547.8.
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