Cipla Ltd. share price target

We expect Cipla to deliver sustainable long-term growth, supported by the continued strength of its India formulations business, an improving chronic therapy mix, and a robust branded franchise.

BUY (maintained)

Cipla’s muted performance in Q1FY27 was due to lower sales of gRevlimid, the discontinuation of lanreotide and a cost surge due to geopolitical tensions.

grew just 3.5% YoY to 7077 crore mainly on the back of weak North America Business which de-grew 21% to 1532 crore. The weakness was on account of high base of gRevlimid and absence of anti-growth hormone drug Lanreotide. On the other hand, domestic formulations (One India) grew 12.4% to 3452 crore, Africa grew 12% to 977 crore, and RoW market grew 27% to 1317 crore. EBITDA de-grew ~33% YoY to 1192 crore with EBITDA margins of 16.7% down 881 bps; GPM declined by 626 bps and stood at 62.5%. PAT de-grew 39% to 786 crore....

Cipla delivered a largely in-line operational performance in 1QFY27. Earnings were better than expected due to higher other income for the quarter. India segment’s YoY growth has been on an uptrend for the fourth
consecutive quarter.

We expect revenue to grow 2.4% YoY to INR 71,269 Mn, supported by steady growth across the India and One Africa businesses.

Muted US sales: CIPLA's Q4FY26 revenues declined 3% YoY to INR 65.4bn, below our estimates. Domestic formulation reported strong growth of 15% YoY. Key therapies such as Respiratory, Urology, Anti diabetic and Cardiac outpaced the market. US sales contribution from gRevlimid and supply issues in gLanreotide. One Africa business reported growth of 21% YoY; whereas EM + EU markets were down 8% YoY. Healthy GMs, EBITDA miss: GMs stood at 66%, down 185bps YoY but up 280bps QoQ. CIPLA reported EBITDA of INR 9.5bn; down 38% YoY; 7% below our estimates. OPM up 19% YoY and 3% QoQ. Ex R&D cost other expenses were up 6% YoY. Resultant PAT...

Sales/EBITDA/PAT reported 1%/11%30% below estimates. Gross Margin reported 360 bps above; EBITDA Margin 176 bps below estimates

The revenues were largely in line except US where intensity was tad higher which was offset by higher growth in other geographies. The management is confident of better performance from India and US in the ensuing year with better performance in second half. FY26 was year of some consolidation mainly due to genericization of gRevlimid and problems in some of its Key Products in US geographies. Going forward, the management momentum to really accelerate in the US from H2FY27 with an aspiration to reach US$ 1 billion annual revenue run rate by exit quarter...

Cipla’s recent product approval of gOfev and gVentolin from the USFDA is likely to start allaying concerns arising on its US growth post the discontinuation of Lanreotide, loss of exclusivity in gRevlimid and regulatory issues at key plants in India.

Cipla received USFDA approval for the first AB-rated generic of Ventolin HFA (albuterol inhaler), giving it a first-to-market edge with pharmacy-level substitution in the US.

CIPLA delivered an in-line revenue. However, it posted lower-than-expected EBITDA/PAT (21%/22% miss) for the quarter. After almost 13 quarters, CIPLA exhibited a YoY decline in EBITDA in 3QFY26.

Cipla Ltd delivered a steady Q2FY26 performance, supported by strong branded generics in India and continued leadership in its US respiratory business (albuterol MDI). The company's strategic focus on high-growth therapies such as obesity and diabetes (exclusive launch of Tirzepatide Yurpeak in India) underpins its long-term growth potential. However, near-term challenges remain, including the anticipated revenue erosion from the Revlimid cliff, increased R&D intensity weighing on margins, and execution risk related to timely approvals, which could limit earnings visibility and margin recovery in the medium term, thereby warranting a more...

Cipla’s near-to-medium term outlook remains positive, underpinned by strong execution in domestic formulations and a visible ramp-up in complex generics and biosimilars in the U.S. market.

The revenues were largely in line except India which was impacted by lower acute respiratory sales. The management is confident of better performance from India in the ensuing quarters. FY26 is likely to be a year of some consolidation with the genericization of gRevlimid and flattish US sales as major launches are expected to pick up momentum in FY27. On the EBITDA margins front, the management is guiding a range of 22.7524% which is slightly below the H1 exit range, due to lower Lenalidomide sales and higher R&D. The future remains bright as the company expects critical launches such as gAdvair (respiratory) by H2FY26 and also has a...

We remain positive on the stock with a BUY rating and arrive at a TP of Rs 1,700/share.

North America sales were higher at USD 233 mn, driven by 22% market share in gAlbuterol and 22% in gLanreotide (can scale to 30%)

We have revised our FY26E/FY27E EPS estimates by +0.9%/-5.2%, as we factor in lower revenue on account of ramp down of Revlimid portfolio and ongoing price erosion in the US market, higher depreciation and amortization expense, offset by higher other income.

Cipla has robust domestic and global product pipelines. US product pipeline to be healthy and will be key to driving growth from H2FY26E and contribute significantly from FY27E onwards.

We remain positive on the stock with a BUY rating and arrive at a target price of Rs 1,700 per share.