Cadila Healthcare reported 31% y-o-y growth in recurring consolidated net profit to Rs1.3 billion in Q1FY09 on the back of 26.5% y-o-y growth in revenue to Rs9 billion.
The performance was led by export formulation segment which reported 66% y-o-y growth to Rs3.3 billion and Hospira JV. EBITDA margin improved 192bps to 21.4% due to favourable revenue mix.
At 10.6x FY11E EPS, the stock is at a 30% discount to its peers like DRL, Sun Pharma, Cipla etc, which trade at average FY11E P/E of 14x.
Leadership position in domestic formulation business, increasing revenue from export formulation business, strong revenue from Nycomed JV, and fast growing consumer healthcare business make Cadila an attractive investment candidate.
We maintain our BUY recommendation.
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