The Hindu Business Line : Cadila Health: New markets foray

The Rs 5-face value Cadila Healthcare stock is seen as a value proposition by some sections, thanks to the company's recent efforts to firm up exposure to newly-emerging markets. These, analysts feel, will help it boost exports considerably in the next few years.

The company's product pipeline, being considered strong at this juncture, will propel it further, it is added.

Cadila's association with Atlanta Pharma (for contract manufacturing) will enable it to de-risk its business further, marketmen point out.

What is also cited is the company's decision to forge two partnerships in fiscal 2006 - with Mayne and Bharat Serums, both for anti-cancer drugs.

Some sections nevertheless believe that the company's business is fairly dependent on the domestic market. Any critical modification on the pricing front here will lead to an impact.

Institutional holding, it is further pointed out, is on the relatively lower side. In September 2006, this stood at 19 per cent or so. LIC, with over 6 per cent, was a strategic shareholder.

At the current market price, the Cadila stock trades at 15.2x fiscal 2008 estimated earnings. On Thursday, it closed at Rs 357.95 on the NSE, with total traded quantity being 3.18 lakh shares.

Nilanjan Dey

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