Cipla Ltd.'s second-quarter profit rose in-line with estimates.
The Mumbai-based drugmaker's net profit rose 11% year-on-year to Rs 789 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 783-crore consensus estimate of analysts tracked by Bloomberg.
Cipla Q2 FY23 Highlights (YoY)
Revenue rose 6% to Rs 5,829 crore, against the estimated Rs 5,818 crore. It grew 12% on a Covid-adjusted base of last year, said the company in the filing.
Ebitda was up 6% to Rs 1,302 crore, compared with the Rs 1,273-crore forecast.
Ebitda margin stood at 22.3% against 22.2%. Analysts had estimated it at 21.9%.
The Q2 FY23 performance reflects strong momentum in One-India business and solid execution on differentiated portfolio in the U.S., including the launch of Lenalidomide, driving their overall revenue and operating profitability despite external headwinds, said Umang Vora, managing director and global chief executive officer at Cipla, in the exchange filing.
"Our reported operating profitability of 22.3% is tracking well within our full-year guidance (for Ebidta margin) of 21-22% range."
In the post-earnings call, Vora said that the R&D spend for the quarter was 5.8% of the revenue. He guided for a 6% R&D spend on total sales for the year.
The company maintains its Ebidta guidance in the range of 21-22% for FY23.
The company is also awaiting U.S. FDA responses on the recent Goa facility inspection observations, he said.
"We have filed responses with the U.S. FDA and are awaiting responses on the next steps."
The Goa plant was already under the "official action initiated" status by the U.S. FDA, which implied that certain objectionable conditions were found and regulatory action were to be recommended.
In Sept., their Indore facility received an establishment inspection report (EIR) which was successfully closed by the U.S. FDA.
Vora said that if the recent U.S. FDA observations lead to an extension of the OAI status on the facility, it will delay a potentially important launch—gAbraxane, used to treat breast cancer—by another six months.
"We are in the process of de-risking our launch pipeline from the Goa facility and moving them to other facilities," he told BQ Prime.
According to him, the company is on track with its peptides launch pipeline.
For the U.S. business, they expect to maintain the revenue momentum from Lenalidomide (gRevlimid) for the coming quarters, he said
Other Highlights (YoY)
India business expanded 12% on a Covid-adjusted base of last year. Otherwise, it grew 6% on an overall basis.
The company said that the core portfolio, adjusted for Covid products, saw strong traction across branded prescription, trade generics, and consumer health.
The U.S. business grew 25% in absolute terms. This was led by successful launch of Lenalidomide (gRevlimid) and continued market share expansion in Lanreotide 505b2—both drugs are used for cancer treatment—said the company in the filing.
South Africa or SAGA region business, excluding animal health business, contracted 13%.
Business in other international markets, including emerging markets and Europe, fell by 7%.
Bulk drugs fell 11% year-on-year.
Shares of Cipla were up 0.31% after results were announced, compared with a 0.18% decline in the benchmark Sensex.
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