Cipla Q3 Preview: Supply disruptions, market share loss to weigh on topline

Cipla Q3 Preview: India’s third largest pharmaceutical company, Cipla, is scheduled to deliver its October-December quarterly earnings for the financial year 2024-25 (Q3FY25) on Tuesday, January 28, 2025. 

 

The pharma major is expected to log a decline on the profit as well as revenue front on quarterly basis, while registering marginal growth on a yearly basis in Q3FY25. This is due to supply disruptions, market share loss in key drugs, and an overall underperformance in the US as well as domestic business, analysts said.

 

According to brokerage estimates compiled by Business Standard, Cipla may see its average revenue rise by 3.2 per cent year-on-year (Y-o-Y) to Rs 6,820 crore as against Rs 6,604 crore in the third quarter of FY24. However, on a quarter on quarter basis, the topline may decrease by 3.2 per cent compared to Rs 7,051 crore in Q2FY25.

 

Moreover, the pharma major may register an average net profit of Rs 1,195 crore for the December quarter, against Rs 1,069 crore in Q3FY24, which translates to an increase of 11.7 per cent Y-o-Y for Q3FY25. 

 

On a quarterly basis, profits could fall by 8.4 per cent. The company reported a profit after tax (PAT) of Rs 1,305 crore in the September quarter of FY25. 

 

Here's what key brokerages anticipate for Cipla Q3 FY25 results:

 

Axis Securities: The brokerage highlighted challenges for Cipla in maintaining a stable market share in Albuterol, though the company is gaining traction in Brovana. Cipla is also gradually building market share in Lanreotide injections. Albuterol, Lanreotide, gRevlimid, and Brovana are projected to contribute stable sales of $238 million in the US market, with gRevlimid expected to generate $33 million in the last quarter.  

 

PL Capital: Analysts pointed out that supply disruptions in gLanreotide are likely to affect US revenues. However, the domestic formulations business is expected to recover, providing some support to overall performance.  

 

Centrum Broking: The brokerage anticipates a 4 per cent Y-o-Y decline in Cipla's US sales, totaling $220 million, primarily due to supply constraints in Lanreotide.  Meanwhile, domestic formulations sales are expected to grow by 7 per cent Y-o-Y to INR 31 billion. Key factors to monitor include the updated timeline for the gAbraxane launch, progress on resolving the Lanreotide supply issue, and timelines for major launches such as gAdvair and gSymbicort.  

 

Nuvama Institutional Equities: Analysts forecast a 3 per cent Y-o-Y revenue growth for Cipla, with the domestic business slightly underperforming the Indian Pharmaceutical Market (IPM) as the company continues to recover in the trade generics segment.  The US business, estimated at $220 million, is likely to face challenges due to facility shutdowns and Lanreotide-related issues. On the other hand, Cipla's Africa business is expected to grow 8 per cent Y-o-Y. Given that Lanreotide is a high-margin product, Ebitda margins are anticipated to see a sequential decline.