Consolidated revenues stood at Rs 5,479 crore, up 6 percent compared to Rs 5,169 crore reported in the corresponding quarter of the previous year.
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Shares of pharmaceutical major Cipla declined nearly 2 percent in the early trade on January 27 after company reported its December quarter numbers.
On January 25, Cipla reported a consolidated profit after tax (PAT) of Rs 729 crore for the third quarter ended December 2021, down by 2.6 percent from Rs 748 crore reported in the year-ago period.
The company registered a PAT of Rs 711 crore in the previous quarter.
Consolidated revenue of the Mumbai-based company stood at Rs 5,479 crore, up 6 percent compared to Rs 5,169 crore reported in the corresponding quarter of the previous year. The company’s revenue in the September quarter was at Rs 5,520 crore.
The strong performance in the overseas markets of the US, South Africa and the Rest of the World (RoW) was overshadowed by the decline in domestic business.
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Here is what brokerages have to say about the stock and the company post December quarter earnings:
Jefferies
Brokerage firm Jefferies has kept buy rating on the stock with a target price of Rs 1,093. The company’s Q3 revenue was in-line but EBITDA & profit were 3% below estimates. The margin impacted by RM inflation, logistics costs & inventory provision. The FY23/24 estimates changed by -2% each on higher R&D costs.
Citi
Citi has maintained buy rating on the stock with a target of Rs 1,120 as company’s Q3 EBITDA/profit was 6%/7% ahead and maintained strong momentum in key markets. The margin was higher QoQ despite cost pressure, helped by cost optimisation. The brokerage expects earnings growth to remain strong even on a high base of FY22.
CLSA
Research house has kept buy rating with a target price of Rs 1,150 as the Q3 was in-line as strong India & US sales offset weak international sales. The US & India should be key levers for margin expansion.
The reinvestment via calibrated R&D strategies should drive mid-to-long term growth. The valuations are attractive, given long-term growth prospects.
Prabhudas Lilladher
Cipla’s Q3FY22 performance was broad based with strong show in domestic formulation and US sales. We continue to remain positive on Cipla’s growth across key segments including India and US given 1) strong traction in respiratory and other portfolio, 2) Ex-COVID, IPM can grow 8-10% going forward with Cipla likely outpacing the market and 3) meaningful delta in US revs are expected from FY23, backed by potential key launches.
We expect 15% EPS CAGR over FY21-24E from base business (ex Revlimid) given resilient earnings, improving visibility from US and strong free cash flow generation.
We broadly maintain our estimates and ‘Buy’ rating with target price of Rs 1100/share based on 24x Dec 2023E EPS plus Rs 20/share for Revlimid. Cipla remains one of our top pick in large cap space.
Motilal Oswal
We raise our FY22E/FY23E/FY24E EPS estimate by 3%/6%/4%, largely factoring in a) incremental business from the US from the commercialization of Lanreotide, b) market share gains in already commercialized ANDAs, c) steady outperformance in the DF market, and d) subdued API sales growth.
We expect a 17% earnings CAGR, led by a 24%/5%/10% sales CAGR in US Generics / DF /SAGA over FY22–24E.
We value Cipla at 25x 12-month forward earnings and add Rs 40 per share of g-Revlimid NPV to arrive at our target price of Rs 980.
We maintain our neutral rating on a limited upside from current levels.
Sharekhan
Growth prospects for the India business are strong and the Cipla is expected to outpace industry growth, while US business is also expected to stagean improvement backed by the growth in existing portfolio and high value product launches planned in 2HFY23.
The South African business also offers a healthy growth outlook.
We maintain our buy recommendation on the stock with unchanged price target of Rs 1,150.
At 09:51 hrs the shares of Cipla were trading at Rs 920.15 apiece on the BSE, up 1.78 percent, while the benchmark Sensex was down 1009.64 points or 1.75% 56,848.51.
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