Cipla Q1 results: Net profit up 18% at Rs 1,177.64 cr, revenue rises 5.8%

Pharma major eyes new therapy areas to fuel future growth

India’s third largest pharma company Cipla reported 18.27 per cent year-on-year (Y-o-Y) rise in its net profit during the first quarter of 2024-25 (Q1FY25). The profit after tax (PAT) came in at Rs 1,177.64 crore in Q1FY25, beating analysts’ estimates.

The pharma major’s revenue from operations rose by 5.8 per cent Y-o-Y to Rs 6,624.86 crore, riding on the India and US performances. 

Sequentially, the company reported 8.6 per cent increase in revenue, while PAT rose by 25.4 per cent.

Cipla stock ended the trading day at Rs 1,578 apiece, an all-time high. It was a 5.2 per cent jump from the previous close on BSE.

The results beat Bloomberg analysts estimates which had forecast a revenue of Rs 6792 crore and PAT of Rs 1122 crore. 

The US business posted all-time high quarterly revenue at $250 million due to traction in differentiated portfolios. Respiratory drug Generic Albuterol market share climbed to approximately 17 per cent. 

The Indian branded prescription business witnessed a growth of 10 per cent, primarily driven by a strong performance in chronic therapies such as respiratory, cardiac, and urology, which outperformed the overall market. The proportion of chronic treatments in the portfolio increased by 1.06 basis points (bps) year-over-year to 61.5 per cent.

The company also successfully completed the transition of its India trade generics business to a new distribution model by the end of the first quarter. This revamped model is expected to enhance operational control, expand distributor reach, and strengthen channel relationships. The business has already resumed growth.

The Indian Consumer Health division reported a Y-o-Y growth of 3 per cent, influenced by the high performance of the previous year. Key brands Nicotex, Omnigel, and Cipladine sealed their leadership positions within their respective market segments.

In South Africa, Cipla, secured the number one position of the private market business recording a growth of 19 per cent Y-o-Y in local currency terms. The private market outperformed the overall market by a substantial margin due to increased sales of key products, successful new launches, and expansion in the over-the-counter (OTC) segment.

Cipla eyes new areas of growth:

Cipla said it is now focusing on diversification as it looks to expand its product portfolio and tap into new growth opportunities beyond its core competencies. 

It is exploring new fields such as obesity and mental health, in addition to strengthening its presence in neurology, movement disorders and epilepsy with the recent central nervous system (CNS) brand acquisition from Sanofi. The company also aims to strengthen its position in antimicrobial resistance and wellness.

Umang Vohra, MD and Global CEO, Cipla said, “We have identified key areas for future growth which are the obesity segment and mental health segment. We are looking at building therapies in those areas as well.”

Cipla is also actively seeking merger and acquisition opportunities, particularly in India and select global markets. The company aims to acquire brands and businesses that align with its core areas of expansion, including branded markets in South Africa and key emerging markets like Brazil. The company is eyeing potential partnering opportunities in the obesity space and is optimistic about its new product launches and therapeutic expansions. 

Vohra emphasised that the US market, in particular, will benefit from a strong pipeline and new product launches.

Cipla has a net cash balance of Rs 8,449 crore. Debt obligations primarily pertain to lease liabilities and working capital management.

The company invested Rs 353 crore in research and development (R&D), constituting 5.3 per cent of sales, reflecting a Y-o-Y increase of 1 per cent. This investment was primarily directed towards product filings and developmental initiatives.