Motilal Oswal has given buy rating to Cadila Healthcare with a target price of Rs 460. The share price moved down by 0.34 per cent from its previous close of Rs 395.95. The stock’s last traded price is Rs 394.60.

Cadila Healthcare Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 40064.17 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 3639.90 Crore, down -2.99 % from last quarter Sales of Rs 3752.10 Crore and up 6.86 % from last year same quarter Sales of Rs 3406.20 Crore Company has reported net profit after tax of Rs 469.90 Crore in latest quarter.

Investment Rationale
The brokerage has raised EPS estimates for FY21/FY22E by 10%/9% to reflect margin improvement and pickup in DF sales. It expects 21% earnings CAGR on the back of 8% sales CAGR in the US (compared to flat US sales for FY20), 7% sales CAGR in DF (considering muted growth in FY21), 23% sales CAGR in EMs, supported by 280bp margin expansion and reduced financial leverage. It continues to value CDH at 21x (in line with its 3-year average) 12M forward earnings to arrive at TP of Rs 460.

Promoter/FII Holdings
Promoters held 74.9 per cent stake in the company as of June 30, 2020, while FIIs held 4.6 per cent, DIIs 12.8 per cent and public and others 7.8 per cent.