IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Add” Cadila Healthcare.
According to IIFL report, the USFDA has finally cleared its warning letter on Cadila’s Moraiya plant. Thus, a key risk over Cadila’s stock has now been removed, making the stock more attractive.
Although the warning letter had not impacted the company’s regular business, new product approvals for the facility were halted, putting pressure on growth. The clearance significantly improves growth outlook for Cadila’s US business, but we would wait for other business segments to perform well before gaining confidence on significant upside to the stock price, report stated.
“We maintain our earnings estimates and increase the target price to Rs.860 from Rs.826. We retain ADD,” brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.