Cadila Health Care Ltd,
Cmp:767.25,
Action:Buy,
Target:861.
Why CADILA....?
Hospira has received the final approval to market the generic Taxotere in the USA. Taxotere is primarily used in treatment of breast, lung and other types of cancer and has a market size of $1.2 billion. Cadila Healthcare had already started the supplies of Taxotere and Gemcitabine (another product under the agreement) to Hospira during Q3FY2011. The approval of Taxotere will result in a strong revenue growth while that for Gemcitabine (approval awaited) would ramp up the growth in the US market. Cadila plans to launch two to three products in the USA (still under registration) in FY2012 which would enable a rapid growth in the next few years. The growth from the Hospira joint venture and the incremental income from the expanded Nycomed facility will provide further cushion to the growth. Moreover, the Abbott deal will also start contributing to the revenues in FY2012 and thus aid the growth. Cadila Healthcare plans to start filing for transdermal products in FY2012.At the current market price of Rs767, the stock is available at valuations of 22.9x FY2011E, 18.8x FY2012E and 15.2x its FY2013E earnings.
Sensex Scrip ID:CADILHC
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