Cadila Healthcare with a target price of Rs 348.
Cadila’s R&D collaboration deal with Eli Lilly is a positive as it corroborates Cadila’s capabilities, although material cash flow would come over long term. This is Cadila’s first collaborative agreement with a big Pharma company in the R&D space, which may in the long term; unlock value for its R&D business.”
“Although overdependence on Nycomed has been a major concern for Cadila, the new client additions in the segment would aid de-risking and decrease the company’s reliance on the same. Further, the Hospira joint venture (JV) is expected to commercialize in April 2009 and start contributing to the company’s Bottom-line from FY2010. Excluding any upsides from the JVs and factoring in a turn down in the Profitability of Nycomed, the company to post a CAGR of 23.5% in Net Profit over FY2008-10E.
It’s a good buy with the target price @348.
more expert views..http://http://www.moneycontrol.com/mccode/news/article/other_reco.php?scid=CHC&topic=Cadila%20Health
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