Shares of Cipla Limited declined 3.6 per cent to hit an intraday low of Rs 911.50 on BSE after the company posted its earnings for the quarter ended June 2021.
The company posted a net profit of Rs 709.92 crore in the April-June quarter of the current fiscal compared to Rs 566.04 in the same quarter of the previous fiscal.
The stock opened 0.23 per cent lower at Rs 943.00 against the previous close of Rs 945.20. Market cap of the firm fell to Rs 1,59,353.18 crore on BSE.
It has gained 25 per cent in the last year and risen 11.5 per cent since the beginning of this year. The share stands higher than 100 day, and 200 day moving averages and lower than 5 day, 10 day, 20 day, 50 day moving averages.
Cipla registered a 27 per cent YoY jump in revenue from operations at Rs 5,504 crore during the June-end quarter. The pharma firm’s earnings before interest, taxes and amortisation (EBITA) stood Rs 1,346 crore in Q1 of FY22, compared to Rs 1,039 crore in Q1 of last year.
The firm saw its India business grow 68 per cent year-on-year from Rs 1,608 crore in Q1 of FY21 to Rs 2,710 crore in the April-June quarter of FY22.
The firm also recorded strong growth in its active pharmaceutical ingredients (API) business, which grew 64 per cent YoY. Cipla said its branded prescription business continued “market-beating performance”, driven by the volume growth in core therapies and support from the existing and new introduction in its coronavirus portfolio during the second wave of the COVID-19 pandemic.
“CIPLA delivered better-than-expected 1QFY22 earnings, led by a superior product mix, operational cost efficiency, a healthy off-take of COVID-related products, and one-time income from the API segment. Cipla is poised to outperform the Domestic Formulation (DF) market and is progressing well on building a complex product pipeline for North America,” said Motilal Oswal.
“We raise our EPS estimate by 6%/4% for FY22E/FY23E, factoring in a) strong traction in prescription/trade generics in the DF segment, b) an extended benefit from cost savings, and c) lower R&D spend. We continue to value Cipla at 24x 12M forward earnings to arrive at Target Price of INR1,000,” the brokerage house added.
Sharekhan has a ‘Buy’ rating on the stock with a target price of Rs 1,150 per share. “A ramp-up in gAlbuterol, approval for Arformoterol Tartrate and a strong product pipeline, including complex generics, could drive US sales,” the brokerage firm noted.
Macquarie has raised the target price to Rs 1,150 per share and maintained an ‘Outperform’ rating because of COVID-19 contribution and recovery in core branded business.
Umang Vohra, MD and Global CEO, Cipla said, “I am pleased to see the robust demand-led traction in core therapies across our branded markets and continued cost control leading to 27 per cent revenue growth and 24.5 per cent EBITDA margin for the quarter. In India, we maintained our market-beating performance as core therapies responded to demand triggers along with support from Covid portfolio during the second wave.”
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