Broking agency, Motilal Oswal is bullish on the inventory of Cadila Healthcare for 23% returns from the present ranges of Rs 541. The agency has set a goal worth of Rs 670, thus giving potential returns of 23% from the present ranges.
Vaccine alternative for Cadila Healthcare
Cadila Healthcare has obtained emergency use authorization (EUA) for its plasmid DNA COVID- 19 vaccine ZyCoV-D. The latter is the primary COVID-19 vaccine authorized in India for adolescents within the 12-18 years age group.
“The management expects to start supplying the vaccine in India from Oct’21.
Based on our conservative estimates, we expect CDH to increase production to 40 million doses from October 21. We expect a 75:25 split between the government and
Mixed price of Rs 320 per dose for private channel and FY22, “Motilal Oswal Institutional Equity noted.
Cadila Healthcare expects to start provides of 100-120m doses of ZyCoV-D every year beginning mid-Sep’21. It is in discussions with the Government of India (GoI) with regard to its pricing and provide.
Cadila Healthcare is the one firm manufacturing the drug substance for its vaccine. “Demand for the vaccine would be driven by the requirement of an additional booster dose of other vaccines, the scope for improvement in immunogenicity, and ability to protect from new COVID-19 variants. Management expects monthly sales of Rs 2-2.5 billion from October 21, which could be increased to a run rate of Rs 5 billion per month. It has a marketing plan to increase demand through pediatricians/state government, “Motilal Oswal Institutional Equities said in its report.
Valuation and examination on Cadila Healthcare inventory
“We reach NPV at Rs. 12 per share for the opportunity created by the Covid-1 vaccine. We continue to value the Cadillac Health Care Base business at 25 times our 12-month forward income at our target price of Rs. 658. We arrive at a target price of Rs 670, including the vaccine opportunity, and maintain our Buy rating on the stock,” the brokerage has mentioned.
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