Cipla Maintains 24% Ebitda Guidance For FY24; Expects Delays in Key Launches

Cipla Ltd. is maintaining its 24% Ebitda guidance for FY24, despite a seasonally slow January-March quarter, according to Chief Executive Officer Umang Vohra. Management commentary indicated delay in key launches.

The company's nine-month Ebitda margin stood at 25.4%.

In the third quarter, the company saw higher revenue from the U.S. due to market share gains and product pick-ups due to the typical buying of stock in December, he said.

The India business grew at 12%, which was higher than that witnessed in the overall pharma market in India, according to him. And their South African business also did well, he said.

For Q4, Vohra has guided for U.S. revenue of around $220 million, lower than the Q3 run-rate where sales were around $225 million. For India, he said that due to reverse seasonality, there will be a slowdown. "We are not seeing any unusual pick-up in anti-infectives in January."

• Delays in key launches – gAdvair and gAbraxane, are expected.

• gAdvair filing is expected by Q2FY25 followed by a six-to-nine month approval timeline.

• Realistic commercial timelines for both these products have likely shifted to FY26 from FY25 earlier

• The opportunity size for these products may get diluted owing to competition.

• Vohra said that for their Indore facility, they are not aware of any import alert as of now.

• Their Goa plant is ready for reinspection, which should happen within six months.

• Delay in gAbraxane’s launch timelines could be avoided if this plant is cleared.

• Product batches of one of the inhaler products that they filed from an alternate facility are ready to be sent for approval.

• For gAbraxane, product batches are yet to be manufactured from the new transferred facility.

• The company has guided for about five peptide approvals / launches coming through in FY25.

• This should help them build on the current base of US revenue.

• Vohra expects product approvals for these transferred products to arrive in the later part of this calendar year or early next year.

• The company plans to launch one of its biosimilar products for the U.S. in India as well.

With regards to the Red Sea conflict and the impact on freight charges, he said that they are seeing some cost escalations, including delays of shipments by around 22–25 days because of the adoption of the longer route for transportation. "We have seen some freight cost build-up in Q3 numbers." He expects elevated freight charges in Q4 as well.

Addressing the issue of their standalone financial statements having leaked on social media, because of which the company was required to bring its result declaration date forward, Vohra said that they have hired an independent third-party consultant and started an investigation. "There seems to be no employee or system issue so far."

Shares of Cipla had surged 7% to hit record highs on Tuesday, a day after it declared a 32% rise in net profit in its Q3 results, which was in line with analysts' estimates. The company's revenue rose 14%, with Ebidta margin coming in at 26.46% for the December quarter.

However, on Thursday, the shares closed 3.38% lower at Rs 1,369.80 apiece, as compared with a 0.51% decline in the benchmark Sensex.

On Monday, too, the stock is trading 2.05% lower at Rs 1341.75 apiece at 11:11 am as compared to 1.24% rise in the benchmark Sensex.