CMP: 362
Total income from operations 3,752 Cr
3,732 Cr (0.02%) YoY | 3,638 Cr (3.12%) QoQ
Year ending revenue: 14,253 Cr Vs. 13,165 Cr (8.21%)
Net Profit of 391.9 Cr
460.1 Cr (-14.77%) YoY 373.9 Cr (-4.83%) QoQ
Year ending Net profit: 1,177 Cr Vs. 1,849 Cr (-36.31%)
EPS (in Rs.) 3.83
4.49 YoY | 3.65 QoQ
Year ending EPS: 11.49 Vs. 18.06
View: Average result and below expectation. Although YoY revenue increased
marginally but profit decreased in YoY and QoQ. FY20 profit also decreased
substantially
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 791 Cr Vs. 700 Cr in Q4FY19 therefore up by 13%
in YoY. EBITDA margin is 21.1% Vs. 18.7% in Q4FY19.
FY20 EBITDA to Rs. 2,419 Vs. 2,982 Cr in FY19 therefore declined by 19% in
YoY. EBITDA margin of 16.9% Vs. 22.6% in FY19.
Company is primarily operating into two main segments viz. Pharmaceuticals
– 86% and consumer products – 14%.
Q4FY20 YoY topline growth for Pharmaceuticals – 1.5% and Consumer Products
– 17%. FY20 Pharmaceuticals topline growth – 1.3% and Consumer Products –
109%. YoY bottom line growth for Pharma – (8.2%) and Consumer products –
7.3%. FY20 bottom line growth for Pharma – (22.3%) and Consumer products –
(8.8%).
The Company filed 30 additional ANDAs during the year with the USFDA,
taking the cumulative filings to 390. The Company received 28 ANDA
approvals during the year, taking the total to 282 product approvals.
During the year, the Company launched the oral anti-diabetic agent, Vinglyn
in India, Vinglyn is now one of the most affordable brands of Vildagliptin
for diabetic patients in India.
Financial
ROE and ROCE is around 14% and 16% respectively and book value per share is
around INR 101 and share is currently trading at 3.6x of its book value.
Company is currently trading at annualized PE of around 32 which is
slightly high as per Industry benchmark. Promoter holding is around 74.9%
in the company which is very strong and stable. FIIs and mutual fund hold
around 7.3% and 4.4% in the company which is decreased by FIIs in QoQ and
slightly increased by mutual fund. Cash and cash equivalent from operating
activities as of March 2020 is around INR 2,505 Cr Vs. 1,281 Cr as of March
2019.
Position: Share strong support price is INR 320. Long term investor should
continue with the company.
Share View: Share price high 383 (52 week) and now 360. Zydus Cadila, a
leading Indian Pharmaceutical company is a fully integrated, global
healthcare provider. Cadila Healthcare Ltd also known as Zydus Healthcare
is an Indian pharmaceutical company headquartered in Ahmedabad, Gujarat,
India. Company has strong formulations, Biologics and Zenerics business in
domestic as well as international presence.
Opportunities: The Company recently signed a non-exclusive licensing
agreement with Gilead Sciences Inc., for the manufacturing and marketing of
Remdesivir, the investigational drug, in 127 countries for fight with Covid
– 19. The Company is also working on a DNA vaccine to fight COVID 19. The
vaccine is currently in the animal testing stage. Company received an
approval for the use of Saroglitazar in the treatment of Non-Alcoholic
Steatol-Iepatitis {NASH) this is for metabolic disorders. In the last seven
years, over a million patients have benefitted from this drug. In January
this year, Saroglitazar also received an approval for the treatment of
Type2 Diabetes Mellitus in logia. The Company also received the marketing
authorization in India from the DCGI for Hepatitis B vaccine. The Phase
Il/III clinical trials for Pentavalent Vaccine were also completed during
the year. The Company completed Phase I clinical trials for Inactivated
Hepatitis A Vaccine while PhaseI clinical trials for its Recombinant
Hepatitis E Vaccine is currently in progress.
Risk: Operating profit declined sharply in FY20. Topline growth is
negligible and almost flat and bottom line growth is negative for FY20.
Mostly Indian Pharma Companies faces US FDA
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