Cipla Q3 Results Review - Inline Performance; Peptide Launches To Shape Near Term Growth: Systematix

Systematix Research Report

Cipla Q3 FY24 earnings performance was in line with our estimates, but was ahead of consensus expectation on Ebitda. In the key markets - India and U.S., revenue growth was in line. India branded formulation delivered an 11% growth (including contribution from Galvus acquisition) and U.S. was flat QoQ.

Cipla has guided for about five peptide approvals / launches coming through in FY25 which should help them build on the current base. We currently assume $30 million in incremental sales in the U.S. from these launches.

With respect to the larger launches in the U.S., Cipla expects to complete the site transfer for gAdvair in mid-year FY25, while site transfer on gAbraxane will take longer.

Hence these launches should get pushed into FY26 and the opportunity size may get diluted owing to competition. There is a possibility for gAbraxane approval to come sooner and ahead of site transfer completion if the Goa facility (currently under official action indicated) from where the product has been currently filed is inspected by the U.S. Food and Drug Food and Drug Administration and the site declared compliant.

We are incrementally building $150 million contribution from limited competition launches in FY26 for Cipla which also includes contribution from gSymbicort that was successfully filed with the US FDA this quarter.

We roll over our price target to FY26E earnings per share and recommend a hold at current market price. Our target price of Rs 1,349 is based on 21 times FY26E EPS.

We expect high single digit revenue growth over FY23 – 26E and expect growth rates to decline thereafter led by erosion in gRevlimid.

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