Cadila Q2 profit up 32.5% on strong growth in US

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Mumbai: Cadila Healthcare Ltd, India’s third-largest pharmaceutical firm by market value, on Tuesday reported a 32.5% year-on-year rise in consolidated net profit for the September-quarter, driven by strong US growth after it launched a generic of Lialda, an inflammatory bowel disease drug, with a six-month marketing exclusivity period.

The Ahmedabad-based company posted a consolidated net profit of Rs503.3 crore in the September quarter, as against Rs379.9 crore in the same period a year earlier. Sales increased 32.2% on year to Rs3,154.9 crore during the quarter.

A Bloomberg poll of 22 analysts had estimated Cadila Healthcare’s consolidated net profit at Rs484.30 crore and sales at Rs2,824.50 crore for the quarter.

Cadila’s US business recorded sales of Rs1,644 crore, up 66% from a year earlier. It launched four products in US during the quarter.

It received approval for 32 products in the US in the reporting quarter.

In the current fiscal year ending March, 15 products are expected to be launched in the US, while 40 products will be launched next year, the company said in an investor call on Tuesday.

The company’s sales in the domestic market rose 15% on year to Rs895 crore.

Earnings before interest, tax, depreciation and amortization soared 68% on year to Rs857 crore during the quarter.

On Tuesday, shares of Cadila Healthcare ended down 0.5% at Rs448.50 on the BSE, while the benchmark Sensex index closed 0.3% lower at 32,941.87 points.

“We believe the performance in the quarter cannot be extrapolated given generic Lialda is likely to see competition in 4QFY18 and India sales to normalize from the GST (goods and services tax-related) restocking seen in the September quarter. We believe that US business momentum in the elevated price erosion environment and recovery in India growth remain key stock triggers from current levels,” brokerage firm J.P. Morgan said in a report on Tuesday.

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