Cipla: Declining India sales lead to a Q1 miss

Margin improvement a silver lining, if sustained, can boost confidence

Cipla in the June quarter bore the brunt of de-stocking because of the goods and services tax (GST). Its domestic sales, the largest contributor to revenue at 40 per cent, declined 13 per cent year-on-year (y-o-y) and, as a result, revenue and profitability fell short of the consensus estimate. Net profit may have beaten expectations but it was largely due to higher other income. Revenue, at Rs 3,525 crore, fell 3 per cent y-o-y, and missed the Bloomberg estimate of Rs 3,886 crore.
 
There are some silver linings, however. For one, looking at the lumpiness in the past, the