Cipla Q1 Results: Profit Jumps 45%, Beats Estimates

Cipla Ltd.'s first quarter net profit rose 45% beating analysts' estimates.

The drugmaker's profit surged to Rs 996 crore in the quarter ended June, according to an exchange filing on Wednesday. That compares with the Rs 860 crore consensus estimate of analysts tracked by Bloomberg. Sequentially, the profit jumped 89%.

Cipla Q1 FY24 Highlights (YoY)

• Revenue rose 18% to Rs 6,329 crore against an estimated Rs 6,199 crore.

• Ebitda up 31% to Rs 1,494 crore as compared with the Rs 1,390 crore forecast.

• Ebitda margin at 23.6% versus 21.3%. Analysts had estimated it at 22.4%.

The Ebidta was driven by the mix and other operational efficiencies, said Umang Vohra, global chief executive officer at Cipla. "Our core operating profitability continues to be strong at 23.6%, expanding by 230 bps over last year."

Other Highlights (YoY)

• India branded-prescription business expanded 11%, trade generics grew 8% and consumer health rose 16% over last year. Overall, it rose 12%.

• The company's One-India business continued the double-digit trajectory, growing at 12% during the quarter, led by branded prescription and sustained growth across chronic therapies.

• The U.S. business grew 43% in absolute terms to $222 million or Rs 1,822 crore. Vohra said continued focus on differentiated portfolios strengthened U.S. business, "which once again posted highest ever quarterly revenue".

• South Africa, or SAGA region, business grew 13%. It bounced back from lows of last year to post double-digit growth. In rupee terms, it fell 5%.

• Business in other international markets, including emerging markets and Europe, rose 9%, excluding Covid in INR terms.

• Bulk drugs rose 1% year-on-year.

The company's investment in research and development stood at Rs 349 crore or 5.5% of sales. It was 27% higher year-on-year.

"We are excited to continue working towards establishing a strong foundation for growth in upcoming quarters, where we look forward to continuing the leadership in chronic therapies in branded prescription business in India, further expanding our differentiated pipeline in the U.S. and targeting to be the biggest prescription business in South Africa," Vohra said.

Vohra has guided for margin to remain in the range of 23-23.5% for FY24 and a revenue growth of 10% in the post earnings call. Also, he said that U.S. revenues are expected to continue at the same run rate, clocking in $210-215 million every quarter. While they lost some ground in gAlbuterol, their overall base business grew, he said. He expects some volume increase in gRevlimid sales.

Vohra, in the call, said that they are yet to hear back from the U.S. Food and Drug Administration on the status of their Indore facility but no approval for gAdvair could be indicative of some issues. They intend to launch the product as soon as the plant is cleared.

He expects single-digit price erosion to continue in the U.S. but added that with the shutting down of certain companies in the U.S., the pricing scenario should readjust and get better.

Shares of Cipla closed 2.30% higher at Rs 1,079 apiece, as compared with a 0.5% rise in the benchmark NSE Nifty 50.