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Shares of Cipla surged 9 per cent to Rs 1,163 on the BSE in Thursday’s intra-day trade after the company 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. The stock of drug maker was trading close to its record high of Rs 1,185.20 touched on November 1, 2022.
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.
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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.
Domestic growth driven by chronic portfolio (grew from 58 per cent to 62 per cent of domestic revenues), whereas US growth was driven by momentum in differentiated portfolio. In South Africa market, Cipla has become second largest prescription player, ICICI Securities said in a note.
Cipla’s strong performance led by superior executions in North America (NA) and domestic formulation (DF) segments. The company is on track to build a complex product pipeline in the peptide space, and reduce compliance risk by incorporating alternate manufacturing sites, Motilal Oswal Financial Services said.
The brokerage firm raised its earnings estimates by 6 per cent each for FY24/ FY25 to factor in: a) reduced competition in the US generics segment, b) better visibility for niche launches in NA, and c) better operating leverage. There has been a healthy revival in outlook for NA markets in addition to better-than-industry performance in the branded generics segment (DF/South Africa), it added.
