In the past three months, Cipla has outperformed the market by surging 26 per cent, as against 10.5 per cent rise in the S&P BSE Sensex. In six months, however, the gains have been even better with Cipla rising 56 per cent as compared to 34 per cent rally in the benchmark index, the S&P BSE Sensex.
For the April-June quarter (Q1FY21), Cipla posted 20 per cent growth in profit before tax (PBT) at Rs 799 crore, on a 9 per cent year-on-year (YoY) growth in revenues to Rs 4,346 crore. On the operational front, the Ebitda came in at Rs 1,049 crore with a resulting Ebitda margin of 24 per cent with focus on cost optimisation across businesses.
“For July-September quarter (Q2FY21), Cipla’s domestic sales would grow 8 per cent YoY partly benefitting from remdesivir and actemra sales. US revenue (USD130mn) is expected to decline 4 per cent quarter-on-quarter (QoQ), as moderation of shortage opportunities in the US to offset market share gain in gProventil. We estimate EBITDA margin to improve 100bps YoY to 21.7 per cent driven by covid-19 led cost savings,” Edelweiss Securities said in pharma & healthcare sector preview.
HDFC Securities has ‘buy’ rating on Cipla with target price of Rs 855 per share. The rating is premised on US is likely to see improved traction on account of a ramp-up in gProventil (Perrigo’s exit to aid) and limited competition launches. The respiratory pipeline and specialty assets add longer term growth visibility, the brokerage firm said.
Adding: "India business should outperform the market driven by continued traction in trade generics, Covid drugs portfolio and benefits of implementation of One-India strategy (double digit growth for three quarters, pre-COVID); ROCE is set to expand by ~400bps to 13 per cent over the next three years driven by operating leverage (tight control on cost)."