This Pharma Stock has potential to generate 100% Return in Short term

In the current market scenario, the market is in downtrend and many have sectors have underperformed

So one has to chose the selective sectors which are defensive enough to their portfolio

So Pharma would be one sector which can help to stablize your portfolio becuase many global factors are positive for this Industry due to recent Covid-19 issue

What happended to pharma industry till now??

The Pharma Index has been consolidating for almost 5 years till now, let me show you some numbers

So in the above image its clear that, the pharma index has made multi year top in April 2015 at 14000 levels and now its trading at 8412

From the above, its giving breakout on monthly charts which means now entering into  bull phase back with a logical reason

Coming back to the company

The company which i am disussing now is Cadila Health Care . Now Its trading at 350 levels

Let us discuss some facts and interesting points about Cadila Health Care for investment purpose

• Cadila Healthcare is engaged in complete pharmaceutical value chain of innovation (research & development), manufacturing, marketing and selling of finished dosage human formulations (generics, branded generics and specialty formulations, including biosimilars and vaccines), active pharmaceutical ingredients (APIs), animal healthcare products and consumer wellness products. 
• The company claim for Innovation in new products and deliver the same over the period of time
• In the recent Covid-19, the company is able to deliver the required hydroxychloroquine  (HCQ) and the company says its carrying out testing of coronavirus vaccine on animals
• The company is one of the largest manufacturers in the world along with Ipca laboratories
• US president donald trump also lifted the ban on exports of this drug 
• It is estimated to supply 100 million of the above tablets to Indian government 

Note: Apart from US, many other countries like Brazil etc are also in the foray to get this medicine, so the demand is at its peak

Note: The above advantages are based on current scenario which might not last forever. One can not invest in the stocks just based on One event . So one has to consider the other factors which are favourable for investing 

Let us discuss some facts regarding Cadila Numbers 

• The revenues have grown consistently at 13% over past 5 years
• The profits also grown at a CAGR of 17% over 5 years
• The company has a solid ROE of 25%
• The debt burden is at Rs. 7000 crores and its debt to EBITDA ratio is approximately 2.5 tmes which is positive
• The interest coverage ratio is 10 times

Let us discuss some interesting facts regarding Technical charts

The company has given montly breakouts and technical indicators in line with the CNX pharma

Conclusion:

With 3-5 years timeframe, one can systematically invest in this 

I have mentioned the buying levels and targets clearly in telegram channel

Follow telegram channel for regular updates: https://t.me/cajagadeesh/

Important 

If you want me to analyse any particular stock and post the analysis here, please post the stock name in the below comment section. I will post the analysis on the same at the earliest

About the Author: 

CA Jagadeesh Atukuri

I am Chartered Accountant and CFA level 2 candidate. I am also a SEBI registered analyst. 

All my views are only educational purpose only and not to be considered as the investment recommendation