Cipla Q3 Review — Margins Surprises Positively; Systematix Maintains 'Buy' On The Stock, Revises Target Price

With respect to generic Abraxane, Cipla has updated its launch guidance to late H2 FY26. The guidance assumes a six month lag in launch post U.S. Food and Drug Administration approval as company is yet to validate the commercial scale batches for gAbraxane..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Systematix Research Report.Cipla Ltd. Q3 FY25 revenues were in line but Ebitda and net income were significantly above our and consensus estimates led by higher gross margins and lower operational costs during the quarter. Ebitda margin for the quarter stood at 28%, as against the expectation of 26%. Better product mix led to the improvement in gross margins. Cipla believes the 28% margin is not sustainable and the current quarter’s performance was driven by a strong contribution of respiratory assets (seasonally strong). The US business declined by 4% QoQ (constant currency terms and in line with guidance) due to disruption in supplies of generic lanreotide which is expected to be restored by the end of Q4 FY25. We maintain a Buy on Cipla with a revised price target of Rs 1,705 based on 25 times FY27E EPS. We forecast revenue/Ebitda/ PAT CAGR of 6%/5%/10% respectively over FY24-FY27E. We estimate gRevlimid contribution at around 30% of earnings in the base which should be replaced by new launches (gAdvair, gSymbicort, gAbraxane). With respect to generic Abraxane, Cipla has updated its launch guidance to late H2 FY26. The guidance assumes a six month lag in launch post U.S. Food and Drug Administration approval as company is yet to validate the commercial scale batches for gAbraxane. We believe gAbraxane has material execution risk and we forecast risk adjusted sales of $50 million in FY27. Assuming gAbraxane launch does not come through, our FY27E EPS can correct by ~5%. .Click on the attachment to read the full report:.Cipla Q3 Results: Profit Rises 49%, Beats Estimates.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Cipla Q3 Review — Margins Surprises Positively; Systematix Maintains 'Buy' On The Stock, Revises Target Price

Systematix maintains a Buy on Cipla with a revised price target of Rs 1,705 based on 25 times FY27E EPS.

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