Cadila Healthcare Q4 Review – Margin Supported By Lower Research And Development: ICICI Securities

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Cadila Healthcare Ltd. reported Q4 FY21 performance largely in line with our estimates.

However, U.S. sales were weak while Ebitda margin was supported by reduced expenditure towards research and development.

Total revenue grew 3.2% to Rs 38.5 billion (our estimate: Rs 37.8 billion) supported by India formulations and consumer businesses.

Ebitda margin (ex-forex) improved 170 basis points to 22.2% (our estimate: 22.0%) driven by lower R&D spend (down 19.0% YoY).

The company has strengthened the balance sheet by substantial net debt reduction to ~Rs 35 billion, aided by internal accruals and equity raise of Rs 10 billion in Zydus Wellness Ltd. (subsidiary).

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