Cipla Q3 Results: Profit Beats Estimates As Sales Jump In India, Europe
The drugmaker’s net profit rose / fell xx% to Rs xx crore year-on-year in the quarter ended December.
Cipla Ltd.’s quarterly profit rose as the drugmaker saw double-digit growth in key markets.
Net profit more than doubled to Rs 748.1 crore year-on-year in the quarter ended December, the drugmaker said in an exchange filing. Analysts tracked by Bloomberg pegged the metric at Rs 604.9 crore.
Revenue rose 18% year-on-year to Rs 5,168.7 crore. Analysts estimated Rs 4,940.6 crore. API revenue rose 22% to Rs 201 crore.
Operating profit rose 62% year-on-year to Rs 1,231 crore—higher than the Rs 1,069.1-crore estimate. Margin expanded more than 600 basis points to 23.8% from 17.4% last year.
The drugmaker had in December settled a patent litigation for the generic of a blood cancer pill with innovator CelgeneCorp, a wholly-owned subsidiary of Bristol Myers Squibb.
Celgene will provide Cipla with a licence to its patents required to manufacture and sell certain volume-limited amounts of Lenalidomide—used to treat myeloma, a form of cancer—in the U.S., sometime after March 2022. The volume of generic lenalidomide sold by the company cannot exceed certain agreed upon percentages until Jan. 31, 2026.
“Considering other settlements, limited build-up of sales over FY23-26E, and unlimited quantities of gRevlimid by Cipla post January 2026E, there could be a potential net present value addition of Rs 40 per share from this opportunity,” Motilal Oswal had said in a note dated Dec. 12, adding the settlement improves business visibility for the company.
Region-Wise Performance
India business grew 22% year-on-year to Rs 2,231 crore.
North America sales rose 10% to Rs 1,037 crore.
Emerging market sales saw a jump of 51% year-on-year to Rs 488 crore.
European business revenue grew 33% to Rs 252 crore.
Scheme Of Arrangement
Cipla's board approved a scheme of arrangement with two wholly owned subsidiaries. The company will transfer its India-based U.S. business into Cipla BioTec, and transfer consumer business to Cipla Health.
"The proposed restructuring is aimed at ensuring a simplified group structure and operational footprint, and a market-aligned logical organisation of resources," the company said in a statement. "Such subsidiarisation helps improve the focus on the U.S. business and enables multiple strategic options to drive further expansion in the future including potential capital raises and other avenues to deepen the presence in the market."
The consolidation is intended to better leverage the strong sterile capabilities and manufacturing environment of Cipla BioTec.
Shares of Cipla ended 1.9% lower before the results were announced compared with a 1.3% in Nifty 50. The stock gained 5.8% in October-December, lagging 24% rise in the benchmark.
