Cipla shares rise 3.5% after Q1; brokerages cautious, trim target

Cipla reported a 39.2 per cent fall in net profit for the first quarter to ₹789.05 crore on a year-on-year basis. Revenue for the quarter was up at ₹7,119.28 crore

Cipla shares climbed 3.6 per cent on Friday, a day after the company announced its Q1FY27 earnings, despite a muted quarterly performance and bearish commentary from analysts.

 

The pharma giant's counter as of 1:39 PM was trading 1.84 per cent higher at ₹1,418.80 per share on NSE. In comparison, Nifty 50 was down 0.43 per cent at 23,767.25. In intraday trade, the stock gained 3.6 per cent to touch the day's high at ₹1,444.80 per share.

 

Cipla Q1FY27 results highlights 

• Cipla Ltd’s consolidated net profit attributable to owners of the parent fell 39.2 per cent year-on-year to ₹789.05 crore in the quarter ended June 30, 2026.
• Revenue from operations increased to ₹7,119.28 crore from ₹6,957.47 crore in the year-ago quarter. 
• Total income, which includes other income, rose 1.6 per cent to ₹7,330.18 crore from ₹7,216.03 crore.
• Total expenses climbed to ₹6,248.25 crore from ₹5,446.10 crore. 
• Purchases of stock-in-trade rose 22.1 per cent to ₹1,251.70 crore, while employee benefit expenses increased 14.1 per cent to ₹1,497.41 crore. 
• Cost of materials consumed declined 7.7 per cent to ₹1,356.93 crore.
• Profit before tax and the share of profit or loss from associates fell 38.9 per cent to ₹1,081.93 crore from ₹1,769.93 crore. 
• The group recorded a ₹1.55 crore share of loss from associates, compared with a ₹0.44 crore loss a year earlier.

Brokerages’ view on Cipla post Q1 Results

Elara | Reduce | Target ₹1,349

 

The brokerage noted that, Cipla reported poor Q1FY27, with revenue, Ebitda and profit after tax missing brokerage's estimates by 2 per cent, 11 per cent and 16 per cent, respectively. Q1 Ebitda margin came in way below full-year guidance of 18.5-20 per cent, at 16.7 per cent, getting full-year margin to the upper half of the guidance range seems difficult. 

 

 

Elara has cut its FY27–FY29 core earnings estimates for Cipla by 2–8 per cent. It has maintained its target price at ₹1,349 and retained its 'Reduce' rating. The brokerage said the target price reflects 19 times FY28 estimated core earnings plus cash per share. The lower valuation multiple is due to a large contribution from one-off products in its FY28 estimates. Faster product launches and stronger sales growth in key US products remain the key upside risks.

 

Nirmal Bang | Buy | Target ₹1,615

 

The brokerage noted that, near-term earnings remain subdued, but the management reiterated its US$1bn North America exit run-rate, reinforcing confidence in a stronger H2FY27 driven by complex launches.

 

"We expect Cipla to deliver a 10 per cent revenue CAGR over FY26-FY28E, underpinned by a stronger US pipeline, resilient domestic franchise, and healthy international execution,"the brokerage said.

 

The brokerage lowered its target price for the stock to ₹1,615 from earlier ₹1,883 but rtained its 'Buy' call and top pick view for Cipla on the heels of  improving growth visibility, robust balance sheet, and attractive long-term earnings trajectory.  =====================================================================  Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.