Buy Cipla; target of Rs 700: Centrum
Centrum’s research report on Cipla
We maintain buy rating for Cipla and revise our TP to Rs700 (earlier Rs610) based on 24x March’19E EPS of Rs29.2. Cipla’s Q2FY18 results exceeded our and consensus estimates. Cipla’s revenues grew 9% YoY, margin improved 160bps to 19.7% and net profit grew 18% YoY. The acquired Invagen and Exelan in the US are well-integrated with Cipla. The domestic business (40% of reveues) grew 12% YoY and 30%QoQ due to re-stocking by trade after successful implementation of GST. Steady growth in the domestic market, with leadership position in respiratory, oncology and anti-infective segments would drive future growth.
We maintain Buy rating for Cipla and revise our TP to Rs700 (earlier Rs610) based on 24x March’19E EPS of Rs29.2, and with an upside of 15.2% over CMP. We have enhanced our FY18E and FY19E EPS estimates by 9% and 15% respectively. We expect the domestic and South African businesses to drive future growth. Key risks to our assumptions include slow growth in the domestic market and regulatory risks for its manufacturing facilities catering to global markets.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.