Indian pharmaceutical major Cipla Ltd. has reported its third-quarter earnings for the financial year ending March 2026, reporting 57% year-on-year decline in net profit, largely driven by the one-time Labour Codes impact of around Rs 276 crore.
Cipla's profit for the December quarter stood at Rs 676 crore, which missed Bloomberg's estimates of Rs 1,247 crore by a significant margin. Revenue remains flat at Rs 7,074 crore, missing analyst expectations of Rs 7,528 crore.
Margin contracted significantly for Cipla in Q3, falling from 28.1% in Q3FY25 to 17.7% in the December quarter.
Cipla Q3 Highlights (Cons, YoY)
- Revenue flat at Rs 7,074 crore.
- EBITDA down 37% at Rs 1,255 crore versus Rs 1,989 crore.
- EBITDA margin at 17.7% versus 28.1%.
- Net profit down 57% at Rs 676 crore versus Rs 1,571 crore.
- The company incurred a one-time cost of Rs 276 crore related to the new labour codes.
Cipla's profitability and margins were impacted by higher expenses and operational costs, with total expenses increasing approximately 13.6% from Rs 5,378 crore to Rs 6,118 crore.
Additionally, the company made significant capital commitments during this period, including Rs 1,107 crores for perpetual rights to manufacture and market the Galvus brand for diabetes treatment. A sum of Rs 110 crore was also used for 100% stake acquisition of Inzpera Healthscience Limited.
Segment compression was also seen in Cipla, with its core pharmaceuticals segment decreasing significantly from Rs 1,888 crore to Rs 1,122 crore.
Shares of Cipla fell sharply after the company reported its Q3 earnings, with shares dipping almost 4.5% and are currently trading in the range of Rs 1,309 against the day's high of Rs 1,385.
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