Underperform on Cadila Healthcare with a target at Rs 346: CLSA

CLSA maintains underperform rating on Cadila Healthcare post March quarter results with a 12-month target price of Rs 346. The FY17 is likely to be a muted year of earnings growth unless Asacol HD is launched, said the CLSA note.

The pricing pressure in the key US product, HCQS has started to show up which will weigh on the stock. HCQS could see further price declines as competitive intensity rises, said the note.

CLSA is of the view that the earnings growth recovery in FY18 hinges on resolution of US FDA issues at Moraiya.