Cipla Q2 PAT up 11% PAT to Rs 789 cr on strong Covid-adjusted growth rate

The company is de-risking key product Abraxane in case the Goa plant FDA issue is not cleared immediately

Mumbai-headquartered Cipla has posted an 11 per cent year-on-year (YoY) rise in profit after tax for the second quarter of the current fiscal to Rs 789 crore as its total revenue from operations grew 5.6 per cent to Rs 5,829 crore.

Revenue growth for the quarter was at 6 per cent on a reported basis and a strong 12 per cent on a Covid-adjusted base of last year. “There were no Covid-19 sales this quarter. If we adjust for that, then we have a 12 per cent growth at a company level, and a 15 per cent growth in India,” said Umang Vohra, MD and Global CEO, Cipla.

He added: “Our reported operating profitability of 22.3 per cent and is tracking well within our full year guidance of 21-22 per cent range. Our proactive logistics management, cost rigour and calibrated pricing actions have helped offset the adverse impact of inflationary cost elements on profits.”

As for the US business, Cipla reported a multi-quarter high of $179 million in revenue and 25 per cent YoY growth. It launched Lanreotide 505b2 in the US market, a drug used in the long-term treatment of acromegaly (a growth hormone disorder) in patients who cannot be treated with surgery or radiation.

Vohra said, “We have 15 products coming up for launch in India. As for the US, we plan to launch generic Abraxane (a chemotherapy drug) in the first half of the next calendar year, and generic Advair (respiratory) launch is also expected in the latter half of this fiscal year.”  

Cipla plans to launch some peptide products too.

"As such, price erosion in the US market is showing signs of easing – it is estimated to be in the range of 5-10 per cent across Cipla’s products," Vohra said.

Meanwhile, the firm’s Goa unit is under official action indicated (OAI) status from the US FDA. Vohra clarified that the company has already submitted its responses to the FDA and hopes to hear from them soon (probably this month).

Vohra added Cipla has de-risked the Abraxane asset already in case the Goa plant resolution does not happen within expected timelines. “If Goa clears, then we can launch this product in the first half of next calendar year, and if it does not clear immediately, then the launch can be in the second half. We are filing this product from another site,” Vohra explained.

Cipla is also working with the FDA on their Indore site.

Cipla’s India business has posted revenues of Rs 2563 crore, an YoY growth of 6.1 percent, and adjusted for Covid19 sales the growth was 15 percent. The company said that they have seen strong traction across all flagship trade generics brands having 15 percent YoY growth, and robust order flow from tier-2 to Tier 6 rural towns. Consumer health business too posted a 22 percent overall growth in India.

R&D investments for the quarter stands at Rs 335 crores or 5.8  percent of sales, higher 22 percent YoY driven by on-going clinical trials on a respiratory asset and other developmental efforts.

(Rs crore)	Q2FY23	Q2FY22	Y-o-Y Growth
Total Revenue from Operations	5,829	5,520	5.6%
EBITDA	1,302	1,226	6.2%
PAT	789	711	10.9%
Source: Company