Cipla Ltd. share price target

We maintain our BUY recommendation with a target price of Rs 1,700/share.

CIPLA delivered better-than-expected 3QFY25 earnings. While revenue was in line, EBITDA/adj. PAT beat our estimates, aided by a better product mix and lower R&D spending.

Cipla's "Future Fit" strategy outlines ambitious growth objectives, including becoming India’s 2nd largest pharmaceutical company, leading South Africa’s prescription and OTC markets, ranking 2nd in U.S. respiratory generics, and doubling international revenue.

Cipla’s revenue was largely in-line with our estimates (-2.0%), EBITDA was in-line (+0.2%) and Adj. PAT beat our estimates (+3.4%) due to lower-than-expected finance costs and higher-than-expected other income.

Goa plant receiving VAI likely to speed up gAbraxane launch in FY25E. In its 2QFY25 earnings call CIPLA said this would be delayed to H1FY27

Earnings in line with our estimates on all fronts. However, US sales was down and 5% lower than our estimates in rupee terms

We maintain our BUY recommendation on the stock

Cipla’s revenue reached Rs. 7,051 crore, reflecting a 7% y-o-y increase and a 6% q-o-q rise, meeting our expectations.

The Q1FY25 performance was slightly below estimates with Cipla’s sales/Gross Profits/EBITDA and PAT for Q1FY25 deviating by -3.2%/-1.6%/-3.2%/-2.3% from our estimates. It was due to weaker than expected performance in SAGA and API partially offset by marginally higher than estimated, US (+3.2%) and Emerging Markets (+3.8%).

We have BUY on the stock.

Cipla delivered in-line 1QFY25 performance. It continued to track well in the US generics segment, with sales scaling an all-time quarterly high of USD250m.

Considering a healthy pipeline of niche products and superior execution in the
branded generics segment, we value Cipla on SOTP basis (24x 12M forward
earnings and NPV of INR30 for g-Revlimid) to arrive at our TP of INR1,700. We
maintain BUY rating on the stock.

Strong traction in North America business and consistent performance in One-India; South Africa and Global Access business stabilising