Industry Overview : 

The pharmaceutical industry is the part of the healthcare sector that deals with medications. The industry comprises different subfields in developing, producing, and marketing medicines. These more or less interdependent subfields consist of drug manufacturers, drug marketers, and biotechnology companies.
The main goal of the pharmaceutical industry is to provide drugs that prevent infections, maintain health, and cure diseases. This industry directly affects the global population, so several international regulatory bodies monitor drug safety, patents, quality, and pricing. Here are some of those regulatory entities:

  • World Health Organization (or WHO)
  • US Food and Drug Administration (or FDA)
  • Medicines and Healthcare Products Regulatory Agency (or MHRA)

The whole Pharma industry depends upon research continuously going on in the field.

The global pharmaceutical industry was worth an estimated $1 trillion in 2014. In 2013, global pharmaceutical markets generated revenues of $980.1 billion. That year, North America (the US and Canada) contributed 41% of sales, while Europe contributed 27.4%. In recent years, India is emerging as a manufacturing hub and exporter in the field due to its well-trained workforce and low-cost treatment. Due to Govt support also, India is becoming essential for low-cost treatment centers.

The Indian pharmaceutical industry is the third-largest in the world and is one of the most developed industries. The pharmaceutical industry is expected to grow with a 15% CAGR from 2015 to 2020 in India, while the Global Pharma industry will simultaneously grow by 5% CAGR. The Indian Pharma Sector is expected to achieve US $55 Billion. Today it accounts for 2.4% of the global Pharma industry in value terms and 10% in volume terms. Even after this, the number of purely Indian Pharma Companies is low. But in the last decade, many big companies are setting up their Manufacturing distribution in India like

Technologically strong and self-reliant, India’s pharmaceutical industry has low production costs, low R&D costs, an innovative scientific workforce, the strength of national laboratories, and an increasing trade balance. Indian pharmaceutical industry today is ranked world-class in terms of technology, quality, and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously.

The industry today can boast of producing the entire range of pharmaceutical formulations, i.e., medicines ready for patient consumption, and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for producing pharmaceutical formulations.

India’s pharmaceutical industry is estimated to be valued at approximately US$ 12.26 billion as industry estimates. This industry is growing @ 10-11% per annum on a compounded growth rate basis. Although the total turnover of the pharmaceutical industry is estimated at 21.04 billion, about 65% of this revenue is from exports. It spends around 18 % of this revenue on research and development (R&D) activities. Additionally, India’s clinical research industry is estimated to be US$ 2.2 billion, with a high growth rate of 23%. Moreover, the Indian pharmaceutical off-shoring industry is slated to become a US$ 2.5 billion opportunity by 2012 due to low R&D costs and a high-talent pool.

By introducing a system of product patents in 2005, the Indian industry has become a worldwide exporter of high-quality generic drugs. India exports pharmaceuticals to many countries worldwide, including the U.S., Germany, France, Russia, and the UK.

Company Overview: Founded in 1952, Cadila healthcare is India’s Fifth largest Pharma company. Is in the business of API and Formulations Manufacturing. It operates in all areas of the Pharma sector. It is among the top 3 in cardiology, gynecology, and pain management. It is also among the top 5 in gastrointestinal, respiratory, and dermatology. The company holds a network in Latin America, Europe, and US markets. The company also operates in the animal healthcare Business. The company applied to US FDA for 269 ANDA (Abbreviated New Drug Application) 10 news in the current Year. The company received a total of 109 permission for manufacturing. Total 122 applications for API also. The company also operates in different levels of Vaccines, NCE, and Biosimilar products and is expected to earn good revenue from that end.

Just like other companies, Cadila also grows in an Inorganic way. For example, the company acquired Banyan Chemicals, German remedies, etc.

The company operates from Three API Manufacturing facilities and Navi Mumbai, Goa, Himachal Pradesh Sikkim.

Zydus Wellness, a company subsidiary, has some brands in its portfolio like sugar-free, EverYouth, and Nutralite. As the supplemental food.

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Financials and Ratios 

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Future Prospects: Future Prospects are hardly any issue when promoter holding is substantial. The pharmaceutical industry is growing fast, and in that fast-growing industry, when the company produces with 10%+ Topline and Has ROCE is high. Hardly there is any issue with the company. The brand value, Infrastructure, and market are significant for any Pharma company. Cadila Healthcare has all of them. The US is a big contributor to the company, and the recent EIR from US regulators is necessary. Various ANDAs and NCEs are under pipeline, and the company is operating well. A research-driven company achieves sales growth of 10%+ per anum, making them very attractive for long-term investment.