Brokerages are recalibrating their stance on Cipla after the US FDA cleared its generic version of Ventolin HFA (albuterol), a widely used asthma inhaler. The approval is being read as a meaningful positive for the company's respiratory portfolio, even as the Street remains divided on the stock's longer-term trajectory. Morgan Stanley has retained its Underweight rating, while nudging up the target price to Rs 1,237 from Rs 1,211. In contrast, Citi continues to back the stock with a Buy rating and a higher target price of Rs 1,530.
Morgan Stanley sees the approval as incrementally positive, pegging a $130 million sales opportunity by FY27, alongside a potential 4% boost to earnings per share. The product is also expected to partly cushion the impact of erosion in Lanreotide sales, while reinforcing Cipla's respiratory franchise.
That said, the brokerage isn't ready to turn constructive just yet. Its core concern hasn't changed — execution. Cipla's earnings visibility, in its view, still hinges heavily on how effectively the broader pipeline plays out. Until there's more clarity on that front, the firm believes upside remains capped despite the immediate tailwinds.
Citi takes a more optimistic stance, arguing that the Ventolin nod does more than just add incremental revenue — it rebuilds confidence. The brokerage expects $50–70 million in annual revenue contribution, which should help offset potential weakness in the US business tied to Lanreotide-related disruptions.
More importantly, Citi sees this as a validation of Cipla's complex generics pipeline, an area where delays in the past — including products like generic Advair — had dented investor sentiment. The latest approval, it argues, signals progress where it matters most.
Key Launches In Focus
Looking ahead, Citi highlights a clutch of upcoming triggers that could shape the stock's trajectory. These include the long-awaited generic Advair, another yet-to-be-disclosed respiratory product, and a peptide therapy, widely expected to be Teduglutide.
The divergence in views boils down to a familiar debate of visibility versus potential. While both brokerages acknowledge the strategic importance of the Ventolin approval, Morgan Stanley remains wary of execution risks, whereas Citi is willing to give Cipla the benefit of the doubt — at least for now.
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