Cipla Ltd. share price target

Cipla Ltd Q2FY18 results comment Revenue grew by 14.23% to Rs. 2975.94 Cr in Q2FY18 when compared to the previous quarter. Also, it increased by 8.67% when compared with Q2FY17.

Total revenues for Q2FY18 were at Rs40.8bn (est. Rs40bn) were down 8.8% YoY and 15.8% QoQ. Gross margins dipped to 62% lowest since Q1FY17, we expect these to ramp up to ~63.5-64% going forward. PAT was up 20.6% at Rs4.1bn, Adj PAT was up 19.3% YoY while down 33.4% QoQ mainly due to lower other income and substantial increase in depreciation and interest (all one-off). Given domestic business has significantly normalized and only price related pain in the US market (~USD2-3mn) we expect the balance year to pan out better. Given most of the regions supporting growth, improvement in the sales mix to...

Drug firm Cipla Ltd.'s operating performance surpassed analyst estimates for the September ended quarter as margins expanded more than expected. Cipla reported a consolidated net profit of Rs 434.95 crore for the September quarter mainly on account of robust domestic sales. The company had posted a net profit of Rs 369.64 crore for the corresponding period of the previous fiscal. The Operating profit margins up by 155 bps YoY to 19.7% and the Operating profit increased by 18% YoY to Rs 804.39 crore. After the 316% increased in other income to Rs 113.33 crore, PBIDTA went up by 30% YoY to Rs 917.72crore....

Maintain NEUTRAL rating with a TP of Rs 630 (20x Sep-19E). Ciplas overall performance was in-line with expectations in 2QFY18, as the company reaped the benefits of post-GST channel re-stocking. The top-line came in at Rs 40.8bn, ~9% up YoY. This was boosted by the domestic business, which grew 12% YoY (both in-line with estimates). EBITDA was Rs 8bn, up 18% YoY. The margin was 19.7%, up ~160bps YoY, driven by operating leverage and a favourable business mix. PAT was up 19% YoY at Rs 4.2bn.

Revenue in-line; Valuation Continues to Remain Pricey Cipla's revenue rose by 8.8% YoY to Rs40.8bn in 2QFY18, in-line with our estimates. Surpassing our estimates by 2.2% and 3.6%, its EBITDA and PAT surged by 18.2% YoY and 17.7% YoY to Rs8.0bn and Rs4.3bn, respectively. Adjusted for GST, its domestic business grew by 19% YoY on the back of inventory re-stocking post GST-led disruptions. While the US business declined by 6.9% YoY to US$95mn, South African business grew by 4.9% YoY. Gross margins declined by 258bps YoY to 62% due to higher R&D; spend, upward contribution from ARV-API sales and pricing pressure in the US. Adjusted EBITDA margin expanded by ~100bps YoY to 19.2% (in-line...

Revenues grew 9% YoY to | 4082 crore, (I-direct estimate: | 4072 crore) mainly due to 12% growth in domestic formulations (GST adjusted growth was 19%) to | 1646 crore. US sales declined 6.5% YoY at | 617 crore (I-direct estimate: | 646 crore) EBITDA margins improved 156 bps YoY to 19.7%, and came above Idirect estimate of 19% mainly due to lower other expenditure. EBITDA grew 18% YoY to | 804 crore (I-direct estimate: | 774 crore) PAT grew 19% to | 423 crore (I-direct estimate: | 437 crore) mainly on better operational performance and higher other income....

to INR3b from INR2.1b in 1QFY18. PAT of INR4.2b was broadly in line. Strong recovery in domestic business; key approvals to drive US growth: Domestic business grew 12% YoY (on a like to like basis, GST-adjusted growth was at 19% YoY) and ~30% QoQ due to channel refilling post GST. Channel inventory is still lower by ~10 days v/s GST levels. CIPLA expects to cover 5-6 days in 2H. US sales declined 3% YoY in 2QFY18. We expect US business growth to be driven by ramp-up of Sevelamer (launched recently), and key upcoming approvals such as Nano-paclitaxel and Albuterol MDI....

We maintain buy rating for Cipla and revise our TP to Rs700 (earlier Rs610) based on 24x March'19E EPS of Rs29.2. Cipla's Q2FY18 results exceeded our and consensus estimates. Cipla's revenues grew 9% YoY, margin improved 160bps to 19.7% and net profit grew 18% YoY. The acquired Invagen and Exelan in the US are well-integrated with Cipla. The domestic business (40% of reveues) grew 12% YoY and 30%QoQ due to re-stocking by trade after successful implementation of GST. Steady growth in the domestic market, with leadership position in...

Cipla posted poor set of numbers for 1QFY2018. Sales came in at `3,432cr (`3,789cr expected) v/s. `3,566cr in 1QFY2017, a yoy de-growth of 3.5%, mainly driven by the dip in Indian formulation sales. Indian formulation sales registered (`1,271cr) a yoy dip of 12.9%, mainly on the back of GST implementation. On operating front, the EBITDA m..

ICICI Securities Ltd | Retail Equity Research Revenues de-grew 3% YoY to | 3525 crore, (I-direct estimate: | 3518 crore) mainly due to de-growth in domestic formulations. Domestic formulations declined 13% to | 1271 crore due to de-stocking at the channel level on account of GST transition. US sales remained flat YoY at | 646 crore (I-direct estimate: | 634 crore) EBITDA margins improved 159 bps YoY to 18.3%, and came in above I-direct estimate of 15.5% mainly on account of higher-thanexpected gross margins. EBITDA grew 6% YoY to | 647 crore (Idirect estimate: | 545 crore)...