Cipla Q1 Results: Profit Falls But Beats Estimates

Cipla's profits falls but beats estimates.

<div class="paragraphs"><p>Drug pills. (Source: Unsplash)</p></div>
Drug pills. (Source: Unsplash)

Cipla Ltd.’s first-quarter profit fell but beat estimates.

The Mumbai-based drugmaker’s net profit was down 4% year-on-year to Rs 686 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 628-crore consensus estimate of analysts tracked by Bloomberg.

Its profit before tax and exceptional items fell 13% as year-on-year. The company had reported an exceptional loss in the base quarter.

Cipla Q1 FY23 Highlights (YoY)

  • Revenue fell 2% to Rs 5,375 crore, against the estimated Rs 5,459 crore.

  • Ebitda fell 15% to Rs 1,143 crore, compared with the Rs 1,062-crore forecast.

  • Ebitda margin stood at 21.3% against 24.5%. Analysts had expected 19.4%.

Umang Vora, managing director and global chief executive officer at Cipla, said in the exchange filing that the company was closely tracking upcoming complex launches in the second half of the ongoing FY23.

“Our reported operating profitability of 21.3% is well within our full-year guidance of 21-22% range and has grown double digit versus last year base Ebidta despite multiple cost headwinds," he said. "Our cost rigor and calibrated pricing actions have helped offset inflationary cost elements, insulate margins while maintaining high serviceability.”

Other Highlights (YoY)

  • India business contracted 8%, contributing 46% to total sales. Adjusted for Covid-19 portfolio, it grew 9%.

  • The company said that excluding Covid contribution, the core portfolio continued momentum, supported by growth across branded prescription, trade generics, and consumer health.

  • The U.S. business grew 16%, comprising 22% of total revenue. This was led by a steady momentum in core formulations or finished drug business, led respiratory and peptide assets.

  • South Africa or SAGA region business, excluding animal health business, contracted 6%.

  • Business in other international markets, including emerging markets and Europe, rose around 24%. The scale, the filing said, was supported by strong direct-to-market growth across geographies, offset by forex volatility and muted business-to-business demand in Europe.

  • SAGA contributed to 15% of the total revenue for the quarter, while international markets made up 13%.

  • Bulk drugs, which make up 3% of the total revenue, slumped 55% year-on-year. This could be attributed to the higher Q1 FY22 base due one-time profit share on an API supply.

Shares of Cipla closed 1.08% higher before the results were announced compared with a 1.25% rise in the benchmark Sensex.