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Nirmal Bang Report
Cipla Ltd.'s Q4 FY24 results closely aligned with our estimates overall, with a minor margin shortfall. The growth was primarily driven by industry-leading performance in the domestic market, particularly in key therapy areas, as well as robust traction in both the U.S. and international markets, resulting in margin enhancement.
The U.S. business reported the highest-ever yearly revenue of $970 million ($226 million for the quarter) as price erosion stabilized on the back of drug shortages. With strong growth witnessed across major geographies, Cipla has given its Ebitda margin guidance for FY25 in the range of 24.5-25.5%.
We remain positive about Cipla mainly due to high contribution from the branded business, robust India franchise, healthy U.S. pipeline, decent margins and improving return ratios.
We maintain Buy on Cipla with a revised target price of Rs 1,594, valuing it at 23 times on FY25E base business earnings per share of Rs 68.8 and net present value of Rs 12.4 for the Revlimid opportunity.
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