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Cadila Healthcare is a growth stock to keep your eyes on

22-05-2015 • About Cadila Healthcare ($CADILAHC) • By InTwits

Pay attention to Cadila Healthcare as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Cadila Healthcare showed fast growth in the last financial year. Cadila Healthcare's revenue surged on 20.4% in FY2015. EBITDA also increased considerably: 50.1% for the same period.

In the last 3 years Cadila Healthcare showed fast revenue growth of 18.6% from FY2012 to FY2015 annually. EBITDA surged on 17.2% from FY2012 to FY2015 annually.

Cadila Healthcare ($CADILAHC) financials for the last 5 years

mln. INR FY2011 FY2012 FY2013 FY2014 FY2015
Revenue44,64750,90061,55270,60084,971
Revenue growth, %14.0%20.9%14.7%20.4%
SG&A, %
EBITDA10,16310,98710,78411,79517,700
EBITDA growth, %8.1%-1.8%9.4%50.1%
EBITDA margin, %22.8%21.6%17.5%16.7%20.8%
Net Income7,1106,5266,5358,03611,485
Net Income margin, % 15.9%12.8%10.6%11.4%13.5%
 
CAPEX5,02112,5367,2434,8405,125
CAPEX/Revenue, %11.2%24.6%11.8%6.86%6.03%
Debt10,97422,95129,23627,00426,513
Cash2,9524,6665,8385,4886,699
Net Debt/EBITDA0.8x1.7x2.2x1.8x1.1x
 
ROIC, %27.8%21.9%15.9%15.6%21.8%
ROE, %37.4%27.4%23.6%25.2%29.9%

Profitability and return on investment


EBITDA growth was partly attributed to margin expansion. EBITDA margin surged on 4.10 pp from 16.7% to 20.8% in FY2015. If we look for the longer period the company showed small EBITDA margin decline of 0.800 pp from 21.6% in FY2012 to 20.8% in FY2015.

Cadila Healthcare shows attractive ROIC at 21.8% for the last 12 months which assumes stable development model. Three years ago it was about the same at 21.9%. For the last three years the average ROIC was 17.8%.

Cadila Healthcare showed fast Net Income margin growth of 2.10 pp from 11.4% to 13.5% in FY2015. In the longer period the company showed Net Income margin growth of 0.700 pp from 12.8% in FY2012 to 13.5% in FY2015.

Cadila Healthcare operates at ROE of 29.9%. It's average ROE for the last three years was 26.2%.

Capital expenditures (CAPEX)


To this fast growth Cadila Healthcare had to invest in CAPEX.The company's CAPEX/Revenue was 6.03% in FY2015. The company showed big decline in CAPEX/Revenue of 18.6 pp from 24.6% in FY2012 to 6.03% in FY2015. Average CAPEX/Revenue for the last three years was 8.22%.

Leverage (Debt)


Cadila Healthcare has medium debt level at 1.1x Net Debt/EBITDA to maintain high growth. In the last 3 years Cadila Healthcare showed big decline in leverage of 0.54x from 1.66x in FY2012 to 1.12x in FY2015.

Peers in Pharmaceuticals


Below you can find Cadila Healthcare benchmarking vs. other companies in Pharmaceuticals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Granules India ($GRANULES)37.6%16.9%43.4%18.1%
Marksans Pharma ($MARKSANS)-66.6%16.7%23.3%43.3%
Sun Pharmaceutical Industries ($SUNPHARMA)-87.8%39.9%40.4%42.4%
Torrent Pharmaceuticals ($TORNTPHARM)22.7%17.7%32.2%13.6%
Abbott India ($ABBOTINDIA)-46.4%8.2%8.7%27.3%
 
Median (41 companies)-45.0%16.7%14.7%12.6%8.6%
Cadila Healthcare ($CADILAHC)14.0%20.9%14.7%20.4%


Top companies by Gross margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top
Dr.Reddy'S Laboratories ($DRREDDY)52.1%57.4%57.6%
Omega Laboratories ($OMEGALAB)0.0%0.0%0.0%0.0%
 
Median (2 companies)46.9%26.1%28.7%28.8%


Top companies by EBITDA margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Sun Pharmaceutical Industries ($SUNPHARMA)34.3%40.8%44.3%44.9%
Divi'S Laboratories ($DIVISLAB)38.1%37.2%38.2%40.2%
Venus Remedies ($VENUSREM)24.9%25.2%25.6%25.5%
Dr.Reddy'S Laboratories ($DRREDDY)21.7%25.8%22.9%25.1%23.2%
Natco Pharma ($NATCOPHARM)21.3%21.5%23.2%24.9%
 
Median (36 companies)16.2%12.7%12.8%14.3%14.3%
Cadila Healthcare ($CADILAHC)22.8%21.6%17.5%16.7%20.8%


Top companies by CAPEX/Revenue, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Granules India ($GRANULES)5.3%8.8%15.2%24.3%11.4%
Dishman Pharmaceuticals & Chemicals ($DISHMAN)24.3%8.4%10.9%21.6%
Venus Remedies ($VENUSREM)26.6%23.2%22.2%17.5%
Shasun Pharmaceuticals ($SHASUNPHAR)4.3%10.4%15.2%15.8%11.3%
Natco Pharma ($NATCOPHARM)20.0%24.4%16.3%14.4%
 
Median (28 companies)7.3%7.7%7.5%5.7%6.4%
Cadila Healthcare ($CADILAHC)11.2%24.6%11.8%6.9%6.0%


Top companies by ROIC, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Alembic Pharmaceuticals ($APLLTD)27.5%29.1%41.5%35.7%
Sun Pharmaceutical Industries ($SUNPHARMA)18.9%24.8%31.1%35.0%
Marksans Pharma ($MARKSANS)-25.8%-142.4%34.9%33.8%
Torrent Pharmaceuticals ($TORNTPHARM)22.3%26.4%30.5%33.2%19.7%
Jenburkt Pharmaceuticals ($JENBURPH)43.6%34.1%29.0%32.4%
 
Median (63 companies)13.5%13.7%13.2%14.4%10.8%
Cadila Healthcare ($CADILAHC)27.8%21.9%15.9%15.6%21.8%


Top companies by Net Debt / EBITDA

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Ind-Swift Laboratories ($INDSWFTLAB)4.6x5.5x16.1x19.5x
Shasun Pharmaceuticals ($SHASUNPHAR)4.5x2.8x4.5x6.0x6.2x
Sharon Bio-Medicine ($SHARONBIO)4.6x4.7x5.3x4.5x
Jubilant Life Sciences Limited ($JUBILANT)5.3x4.0x3.5x3.5x6.4x
Kopran ($KOPRAN)6.0x4.5x3.0x3.0x
 
Median (50 companies)1.6x1.4x1.2x0.3x2.1x
Cadila Healthcare ($CADILAHC)0.8x1.7x2.2x1.8x1.1x


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