Cadila Healthcare Overview

Cadila Healthcare Limited (also known as Zydus Cadila) is an Indian multinational

pharmaceutical company headquartered in Ahmedabad, Gujarat, India primarily engaged in
the manufacture of generic drugs.
Cadila was founded in 1952 by Ramanbhai Patel (1925–2001 and his business partner
Indravadan Modi. It evolved over the next four decades into an established pharmaceutical
company.
In 1995 the Patel and Modi families split; the Modi family's share was moved into a new
company called Cadila Pharmaceuticals Ltd., and Cadila Healthcare Ltd became the Patel
family's holding company.
Currently it is a Large Cap company (having a market cap of Rs 56,341.67 Crore) operating
in pharmaceuticals sector and with number of employees over 25000
Cadila Healthcare Ltd. key Products/Revenue Segments include Pharmaceutical Products,
Other Operating Revenue and Export Incentives for the year ending 31-Mar-2021.
For the quarter ended 30-06-2021, the company has reported a Consolidated Total Income of
Rs 4,057.00 Crore, up 6.58 % from last quarter Total Income of Rs 3,806.40 Crore and up
10.77 % from last year same quarter Total Income of Rs 3,662.40 Crore. Company has
reported net profit after tax of Rs 635.50 Crore in latest quarter.
Cadila Healthcare engages in the research, development, production, marketing, and
distribution of pharmaceutical products. Its product portfolio includes active pharmaceutical
ingredients and human formulations. The company offers branded formulations in the
therapeutic areas of neurological, neutraceutical, pain management, gastro intestinal,
respiratory, anti-infective, biological, cardiovascular, female healthcare, dermatology, and
others. It also provides consumer wellness products, such as Sugar Free, a low calorie sugar
substitute
The company’s top management includes Mr.Pankaj R Patel (CEO), Dr.Sharvil P Patel,
Mr.Ganesh N Nayak, Mr.Bhadresh K Shah, Mr.Mukesh M Patel, Mr.Nitin R Desai,
Ms.Dharmishtaben N Raval, Ms.Apurva S Diwanji.
Company has Deloitte Haskins & Sells LLP as its auditors.
As on 30-09-2021, the company has a total of 102.37 Crore shares outstanding.
Market Capitalization (Market cap)
Market capitalization refers to how much a company is worth as determined by the stock
market. It is defined as the total market value of all outstanding shares. To calculate a
company's market cap, multiply the number of outstanding shares by the current market value
of one share. Market cap = share price x shares outstanding

Market Capitalization 2021 (INR crores)

Sun Pharmaceutical Industries 197,069
Ltd.
Divi's Laboratories Ltd. 134,618

Dr. Reddy's Laboratories Ltd. 80,688

Cipla Ltd. 73,982

Piramal Enterprises Ltd. 65,300

Apollo Hospitals Enterprise Ltd. 62,964

Cadila Healthcare Ltd. 56,306

Torrent Pharmaceuticals Ltd. 51,989

Alkem Laboratories Ltd. 47,193

Abbott India Ltd. 46,319

0 50,000 100,000 150,000 200,000 250,000
The following chart compares market capitalization between Abbott India and Cadila
Healthcare over last 5 Years.

Market Capital in Cr
60,000
50,000
40,000
30,000
20,000
10,000
-
Mar-17 Mar-18 Mar-19 Mar-20 Mar 21 Oct'21

Abbott India Cadila Healthcare

Abbott India's market capitalization CAGR is 41% versus Cadila Heathcare's market
capitalization CAGR of 9%. Abbott India's worth in stock market has grown rapidly over the
last five years, while it has stagnated for Cadila Heathcare.
Market capitalization does not necessarily account for the true value of the business. Shares
are often over- or undervalued by the market, meaning the market price determines only how
much the market is willing to pay for its shares.
Profitability
Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a
financial ratio used to calculate the percentage of profit a company produces from its total
revenue. It measures the amount of net profit a company obtains per dollar of revenue gained.
Net Profit margin = Net Profit ⁄ Total revenue x 100

Gross Revenue in Crs Total Expenses in Crs

7,500 7,500
5,000 5,000
2,500 2,500
- -
Mar-17 Mar-18 Mar-19 Mar-20 Mar 21 Mar-17 Mar-18 Mar-19 Mar-20 Mar 21

Abbott India Cadila Healthcare Abbott India Cadila Healthcare

Net Profit in Crs Net Profit Margin Ratio

2,000 30% 25%
20% 22%
1,500 19% 19%
20% 14% 16%
12% 12%
1,000 10%
10%
500
- 0%
Mar-17 Mar-18 Mar-19 Mar-20 Mar 21 Mar-17 Mar-18 Mar-19 Mar-20 Mar 21

Abbott India Cadila Healthcare Abbott India Cadila Healthcare

Cadila Health’s Revenue is 172% of Abbott India. Both companies followed tight control
over expenses resulting in 20% reduction in expenses, currently expenses represent 80% of
revenues in both cases. Over the years, Cadila Health has maintained its bottom line at about
20%. In comparison the profitability of Abbott India is lower but is improving with CAGR of
14% over last 5 years, with 16% in FY’21 .
However, a single number in a company report is rarely adequate to point out overall
company performance.
Debt-to-equity ratio
The debt to equity ratio is a financial, liquidity ratio that compares a company’s total debt to
total equity. A higher debt to equity ratio indicates that more creditor financing (bank loans)
is used than investor financing (shareholders). A lower debt to equity ratio usually implies a
more financially stable business. Companies with a higher debt to equity ratio are considered
more risky to creditors and investors than companies with a lower ratio.
As a thumb rule debt ratio of 0.4 are considered better, means that there are 40% as many
liabilities than there is equity.
In case of Cadila Health care the Dept to
Debt To Equity Ratio
equity ratio is decreasing which implies that
0.42 0.39
the funding through equity via shareholders is 0.34
0.26 0.26
increasing compared to financing by
borrowing money.
Whereas in case of Abbott India the entire Abbott India Cadila Healthcare
funding is through shareholders equity.

Return on assets ratio (ROA)

The return on assets ratio measures how efficiently a company can manage its assets to
produce profits during a period. Since company assets’ sole purpose is to generate revenues
and produce profits, this ratio helps both management and investors see how well the
company can convert its investments in assets into profits. Generally, the higher a company's
return on assets percentage is, the more efficient the company's management is in generating profit
from its assets.
The return on assets ratio = dividing net income / average total assets.
The ROA ratio of Abbott India is consistent
Return on Assets Ratio ROA
at around 24%, indicating assets are being
30.0% 25.7%
managed efficiently. But, Cadila Health's 21.1%
23.8% 22.6% 24.1%
ROA ratio has declined over the past two 20.0%
12.3% 12.7%
9.4% 9.1%
years, indicating that the company has made 10.0% 5.8%
significant investments in assets and returns 0.0%
are still pending. Mar-17 Mar-18 Mar-19 Mar-20 Mar 21

Abbott India Cadila Healthcare

Return on equity ratio (ROE)
The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company. ROE is also and indicator
of how effective management is at using equity financing to fund operations and grow the
company.
Return on equity ratio = Net income / shareholder’s equity.
Abbott India's ROE ratio is constant at about Return on Equity Ratio ROE
24%, indicating consistent profit generation 30% 26% 24% 23% 24%
from shareholder investments. Cadila Health's 21%
20%
ROE ratio has decreased over the past two 12% 13%
9% 9%
years, indicating that it has made significant 10% 6%

investments in assets through equity, but 0%

profits have remained flat. Mar-17 Mar-18 Mar-19 Mar-20 Mar 21

Abbott India Cadila Healthcare