 "Cipla Q2 results: Net profit rises 15% to Rs 1,303 crore, revenue up 5.6%")
This report has been updated India’s third-largest pharma company Cipla posted a 15.2 per cent year-on-year (Y-o-Y) growth in its consolidated profit after tax (PAT) at Rs 1,303 crore for the second quarter of the current financial year, compared to Rs 1,131 crore during the same period in FY24.
The company's revenue from the sale of products during the period grew by 5.6 per cent to Rs 6,961 crore in Q2FY25, up from Rs 6,589 crore during the same period last financial year. The increase in net profit can be attributed to strong performance in the domestic market, product mix, and operational efficiencies.
Kamil Hamied will rejoin the board of directors starting November 1. He stepped down in 2015, reportedly due to a lack of interest in the company's day-to-day operations and a desire to pursue other interests. Now, after more than nine years, the 42-year-old Hamied will return as a non-executive director, representing the promoter family. His role will focus on promoting and managing the company's value systems, growth, and relevance of support.
Sequentially, revenue from operations grew by 5.1 per cent, while PAT grew by 10.6 per cent. The firm’s Ebitda (earnings before interest, tax, depreciation, and amortisation) rose by 10.7 per cent Y-o-Y, reaching Rs 2,076 crore. Profit exceeded Bloomberg estimates by 5 per cent, while revenue fell short by 0.3 per cent.
Umang Vohra, managing director and global chief executive officer of Cipla, stated, “In Q2FY25, we recorded a revenue growth of 9 per cent over last year with a highest-ever Ebitda margin of 26.7 per cent, driven by mix and other operational efficiencies. Going ahead, the focus will be on growing our key markets, further building our flagship brands, investing in future pipeline as well as focusing on regulatory resolutions.”
Eyes growth in India and the US
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Cipla is focused on driving growth in India, with plans to capitalise on respiratory product demand due to rising pollution. Acute and chronic respiratory categories are expected to perform well, with seasonal upticks anticipated.
"Across the industry, there’s been a slower offtake in antibiotics due to an unusual seasonal pattern. However, going ahead, we anticipate a stronger respiratory season in October, November, and December. This period is characterised by increased pollution and allergens, which can drive demand for respiratory medications," stated Vohra.
Cipla plans to continue expanding in the chronic segment by adding new team members and increasing its product portfolio, particularly in neurology and epilepsy. Although no products have launched in obesity, there are plans to expand into weight loss and other emerging health segments as regulatory approvals evolve.
Cipla’s pipeline includes new respiratory, oncology, and chronic disease treatments, along with injectable peptide products. These launches are anticipated in both India and the US markets. However, regulatory delays in the US, particularly at certain facilities, could temporarily impact the pace of growth in the region.
Cipla’s Chinese subsidiary, now wholly owned, is expected to bolster its manufacturing capacity, particularly for products targeting export markets, including the US. Specific pipeline products are earmarked for the Chinese market.
Performance across markets
The Indian branded prescription business witnessed 5 per cent growth against 12 per cent growth due to the slow market affecting performance in anti-infectives, one of Cipla’s largest therapies.
The trade business was also impacted by seasonality, with slow growth in the acute category. This business is expected to return to its growth trajectory in the upcoming quarters.
The Consumer Health division showed 21 per cent Y-o-Y growth, with anchor brands such as Nicotex, Omnigel, and Cipladine maintaining their leadership positions.
The North American market revenue reached $237 million, marking a 4 per cent Y-o-Y increase, driven by momentum in differentiated products. The Albuterol market share was approximately 19 per cent as of September 20, 2024, while the Lanreotide franchise captured around 35 per cent market share by August 2024. The company received approvals for four new generic drugs, including one peptide.
The North Africa business, previously part of Emerging Markets and Europe, has merged into the newly renamed "One Africa" segment. This region achieved 22 per cent Y-o-Y revenue growth, led by strong performance in South Africa’s private market, where secondary growth reached 8.6 per cent compared to the market's 0.5 per cent growth. Cipla now holds the second position in South Africa’s private market, with its prescription business at the top.
The Emerging Markets and Europe segment posted an 18 per cent Y-o-Y revenue increase in US dollar terms, supported by growth in direct-to-market (DTM) and B2B segments.
Total research and development spend reached Rs 385 crore, equivalent to 5.5 per cent of sales, a 2 per cent increase Y-o-Y. The company reported a strong net cash balance of Rs 7,950 crore, with debt mainly consisting of lease liabilities and working capital needs.
The firm’s stock declined by 1.67 per cent to Rs 1,478.1 apiece on the BSE. The results were announced during market hours on Tuesday.
Booster shot
Revenue growth: Product sales reached Rs 6,961 cr, up 5.6% Y-o-Y
Record margin: Ebitda margin
hit a high of 26.7% due to efficiency gains
Respiratory expansion: Focus on respiratory growth amid seasonal pollution spikes
New pipeline: Expanding chronic and respiratory treatments in India and the US