Cipla Q2 Results Review - Goa OAI Resolution Remains The Imminent Trigger: Systematix

Systematix Research Report

Cipla Ltd.'s Q2 FY25 revenues were in line but Ebitda and net income were slightly above our estimates. U.S. growth (-4.8 QoQ) and Domestic formulations growth (5% YoY) was lower than expectations. U.S. growth was impacted due to temporary supply issues in Lanreotide which are expected to be resolved by the end of Q3 FY25.

Domestic branded formulations business was impacted due to slow seasonal growth. We tweak our estimates on Cipla and roll forward our target price to Rs 1,756 based on 25 times September FY27E EPS. We upgrade to Buy from Hold at current market price.

The target valuation multiple has been revised to 25x (from 23x) as FY27 earnings would reflect a normalized earnings base (gRevlimid would have seen full erosion).

The key catalysts for the stock going forward would be approval for gAbraxane, respiratory and peptide assets in the US markets, and revival of growth in domestic branded formulation space. With close to $1 billion in net cash, potential inorganic initiatives would be crucial and would shape confidence around medium to long term growth.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.