Cadila Healthcare Company analysis

Industry Overview : 

The pharmaceutical industry is the part of the healthcare sector that deals with medications. The industry comprises different subfields pertaining to the development, production, and marketing of medications. These more or less interdependent subfields consist of drug manufacturers, drug marketers, and biotechnology companies.
The main goal of the pharmaceutical industry is to provide drugs that prevent infections, maintain health, and cure diseases. This industry directly affects the global population, so a number of international regulatory bodies monitor things like drug safety, patents, quality, and pricing. Here are some of those regulatory entities:

  • World Health Organization (or WHO)
  • US Food and Drug Administration (or FDA)
  • Medicines and Healthcare Products Regulatory Agency (or MHRA)

Whole Pharma industry depends upon research continuously going on the field.

The global pharmaceutical industry was worth an estimated $1 trillion in 2014. In 2013, global pharmaceutical markets generated revenues of $980.1 billion. That year, North America (the US and Canada) contributed 41% of sales, while Europe contributed 27.4%. In recent years, India is emerging as Manufacturing hub and exporter in the field due to its well trained workforce and low cost treatment. Due to Govt support also, India is becoming important for low cost treatment center.

Indian pharmaceutical industry is third largest in the world and is one of the most developed industries. It is expected that pharmaceutical industry will grow with 15% CAGR from 2015 to 2020 in India while Global Pharma industry will grow 5% CAGR in the same time. The Indian Pharma Sector is expected to achieve US $55 Billion. Today it account for 2.4% of global Pharma industry in value term and 10% in volume term. Even after this all the number of purely Indian Pharma Companies is low. But in last decade, many big companies are setting up their Manufacturing distribution in India like

Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific manpower, strength of national laboratories and an increasing balance of trade. Indian pharmaceutical industry today is ranked world class, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

The industry today can boast of producing the entire range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations.

The pharmaceutical industry in India is stated to be valued at approximately US$ 12.26 billion as per industry estimates. This industry is growing @ 10-11% per annum on compounded growth rate basis. Although total turnover of pharmaceutical industry is estimated at 21.04 billion, about 65% of this revenue is from exports. It spends around 18 % of this revenue on research and development (R&D) activities. Additionally, India’s clinical research industry is estimated to be a US$ 2.2 billion with a high growth rate of 23%. Moreover, Indian pharmaceutical off-shoring industry is slated to become a US$ 2.5 billion opportunity by 2012, due to low R&D costs and a high-talent pool.

Through the introduction of a system of product patents since 2005, Indian industry has today become very a worldwide exporter of high quality generic drugs. India exports pharmaceuticals to many countries across the world, including the U.S., Germany, France, Russia and UK.

Company overview  : Founded in 1952, Cadila healthcare, India’s Fifth largest Pharma company. Is in the business of API and Formulations Manufacturing. It is Operating in all areas of Pharma sector. Out of which it is among top 3 in cardiology, gynaecology, pain management. It is also among top 5 in gastrointestinal, respiratory, dermatology. The company hold network in Latin America, Europe, US markets. The company also operating in animal healthcare Business. The company applied to US FDA for 269 ANDA (Abbreviated New Drug Application) 10 new in the current Year. The company received total 109 permission for manufacturing. Total 122 application for API also. The company also operating in different levels if Vaccines, NCE, Biosimilar products and expected to earn good revenue from that end also.

Just like other companies, Cadila also grow with Inorganic way. The company acquired Banyan Chemicals, German remedies etc.

The company operates from Three API Manufacturing facilities and Navi Mumbai, Goa, Himachal Pradesh sikkim.

Zydus wellness, subsidiary if company having some brand in its portfolio like sugar-free, EverYouth and Nutralite. As the supplemental food.

SHAREHOLDING

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Financials and Ratios 

 2010-112011-122012-132013-142014-152015-16
Revenue4630.605263.306357.7072248651.309837.60
Net Profit711652.6 0653.50803.601150.601522.60
Net Profit Margin20.9020.8613.5 622.3524.0528.10
EPS29.8132.1124.3544.1362.0819.31
ROA17.6313.938.9814.7417.3222.58
ROE29.2025.7917.1224.8928.0832.21
ROCE22.3119.1512.8219.3323.8128.93
Dividend per Share6.257.57.59123.20
Dividend Payout20.9623.3630.8020.3919.3216.56
Debt to Equity0.250.430.570.390.280.17
Asset Turnover84.3566.7266.2264.7472.0280.37

Future Prospects : Future Prospects is hardly any issues when promoter holding is such a strong. Pharmaceuticals industry is growing fast and in that fast growing industry when company grows with 10%+ Topline and Having ROCE is such high. Hardly there is any issue with the company. The brand value, the Infrastructure, market is very important for any Pharma company. Cadila Healthcare have all of them. US is big contributor for the company and recent EIR from US regulators is important. Various ANDAs, and NCE are under pipeline, the company operating well. Being research drivan company achieve sales growth 10%+ per anum, it make them very attractive for long term investment

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter