Cadila Q3 a miss on many frontsZYDUSLIFE - 357 Change: 18.10 (5.34 %)
News: Revenues de-grew 3.7% YoY to Rs.3655 crore (I-direct estimate: Rs.3853 crore) mainly due to 6.2% YoY decline in US business to Rs.1504 crore (I-direct estimate: Rs.1548 crore) and Domestic formulations de-growth of 2.2% YoY to Rs.1079 crore (I-direct estimate: Rs.1224.9 crore). Emerging markets was flat YoY at Rs.291 crore (I-direct estimate: 328.4 crore) while APIs posted a growth of 25% YoY to Rs.165 crore (I-direct estimate: 142.6 crore). Wellness segment grew by 1.7% YoY to 382 crore (I-direct estimate: 419.3 crore). EBITDA margins declined 67 bps to 20.6% (I-direct estimate: 21.5%) mainly due to higher input cost and pricing pressure in US being partially offset by lower employee and other expenditure. Subsequently, EBITDA de-grew 6.7% YoY to Rs.752.5 crore (I-direct estimate: Rs.828.4 crore). Adjusted Profit was down 5.1% YoY to Rs.500.4 crore (I-direct estimates: Rs.573 crore).
Views: India formulations business, after recent restructuring, is likely to stabilise. The wellness segment performance hinges upon the company’s marketing & distribution prowess besides effective product positioning. On the US front, the company's plan to venture into complex injectables is likely to provide meaningful traction from FY23-24 onwards. Similarly, addition of biosimilars (like Trastuzumab, Adalimumab, Pegfilgrastim, Bevacizumab, etc.) for emerging markets (like LatAm, MENA markets and South East Asia) is expected to provide growth impetus, going ahead. Lingering issues such as Moraiya warning letter resolution, US base business performance in tough times are some important aspects to watch.