Cipla drops over 3% ahead of Q2FY25 results; know what analysts expect

Shares of Cipla dropped 3.55 per cent at Rs 1,450 per share on the BSE in Tuesday’s intraday trade. The shares fell ahead of the pharma major’s second quarter earnings for the financial year 2024-25 (Q2FY25) scheduled to be delivered today i.e Tuesday, October 29, 2024. 

 

Analysts expect Cipla to register a low single digit rise in the topline and bottomline, with margins being impacted by modest sales in the US and domestic formulations. 

 

According to brokerages tracked by Business Standard, Cipla is expected to report an average net profit Rs 1,174 crore in Q2FY25, a rise of 1.55 per cent year-on-year (Y-o-Y) against Rs 1,156 crore in Q2FY24. Meanwhile profits may stay flat or decrease by 0.17 per cent quarter-on -quarter, compared with a profit after tax (PAT) of Rs 1,176 in the June quarter of FY25. 

 

 

Cipla’s average revenue will potentially increase 4.1 per cent Y-o-Y to Rs 6,957 crore as against Rs 6,678 crore in Q2FY24. Sequentially revenues may rise by 3.92 per cent. The pharma company registered revenues of Rs 6,694 crore in the June quarter of FY25. 

 

Analysts at Kotak Institutional Equities expect Cipla to report 10 per cent Y-o-Y growth in domestic sales in Q2FY25, led by 8 per cent growth in its organic business and contribution from Sanofi's CNS portfolio. In addition, analysts expect some negative impact for two months due to the transition in the trade generics model in the previous quarter. 

 

They build US sales at $239 million down 4 per cent Q-o-Q, led by stable market share in Albuterol amid supply challenges for Lanreotide, along with Revlimid sales of $30 million tad higher than Q1FY25. 

 

Those at Axis Securities say that Cipla could face challenges in maintaining a stable market share in Albuterol, while it is gaining market share in Brovana. The company is gradually building market share in Lanreotide injections, they said,  anticipating that Albuterol, Lanreotide, Revlimid, and Brovana will contribute to stable sales of $238 million in the US market. Read more

 

The company has a total market capitalisation of Rs 1.17 trillion crore. Its shares are trading at a price to earnings multiple of 61.66 times and at an earning per share of Rs 138.72. 

 

At 10:52 AM, the stock price of the company was down 2.66 per cent at Rs 1,463.50 a piece on the BSE. By comparison, the BSE’s Sensex slipped 0.61 per cent to 79,516.57 level.