 "cipla")
Shares of Cipla hit a new high of Rs 1,238.55, as the rallied 6 per cent on the BSE in Friday’s intra-day trade, extending its past one week gain, on buzz that the promoters are looking to sell a part stake to private equity investors. In past seven trading sessions, the stock has surged 16 per cent. It surpassed its previous high of Rs 1,194.55 touched on July 27.
On clarification on news report, Cipla on July 27, said that it is not aware of any such event. “The company will make appropriate disclosure in compliance with the Listing Regulations as and when any such requirement arises”, Cipla had said in an exchange filing.
According to Business Standard report, private-equity majors Blackstone and Baring have initiated talks with the Hamied family, the promoters of pharmaceutical firm Cipla, to acquire up to 20 per cent in the company. The family owns 33.47 per cent and may become minority owners if the talks succeed, the newspaper reported quoting a source close to the development.
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Meanwhile, Cipla had reported better-than-expected June quarter (Q1FY24) performance, with consolidated profit after tax (PAT) up 45.1 per cent year-on-year (YoY) at Rs 996 crore.
In Q1FY24, income from operations grew 17.7 per cent YoY at Rs 6,329 crore. On a sequential basis, the company’s revenue grew by 10.2 per cent while PAT growth was 40.6 per cent. Cipla said strong growth in its India business - prescription, trade generics and consumer health arms - over last year has boosted revenue.
In Q1 FY24, the company recorded growth of 18 per cent over last year with earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 1,494 crore driven by mix and other operational efficiencies. Its core operating profitability continues to be strong at 23.6 per cent expanding by 230 bps over last year.
For FY24, Cipla raised its EBITDA margin guidance to 23 per cent from 22 per cent earlier. The management guided capex is at 4- 5 per cent of revenue (Rs 1,000 - 1,050 crore). Further, management raised its North America (NA) base business quarterly run-rate guidance to $210 - 215 million from $195 million earlier.
Analysts at Prabhudas Lilladher said they continue to remain positive on growth across key segments including India and the US given strong traction in respiratory and other portfolio, potential growth of 10 per cent plus in domestic formulations and sustainability of current US revs, backed by prospective key launches over FY25.
“We continue to stay positive on Cipla’s on account of increased focus on domestic market and US generics. It has a strong product launch pipeline for the US, India Emerging Markets, which is expected to boost the revenues as well the profitability of the company,” analysts at KRChoksey Shares and Securities said in result update. The brokerage firm has ‘buy’ rating on the stock with target price of Rs 1,389 per share.
