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Cipla - Cautious near-term outlook but promising pipeline ensures healthy future

ICICIdirect Research 16 May 2025 DISCLAIMER

Revenues grew ~9% YoY to ₹ 6598 crore on the back of ~31% growth in Emerging Markets & Europe, 9% growth in India and 7% growth in South Africa. US was flattish with a growth of ~2% due to supplier related issues.

EBITDA grew ~17% YoY to ₹ 1537.6 crore with 150 bps margin expansion to 22.8% tracking strong GPM performance (up 74 bps to 67.5%). PAT grew ~30% to ₹ 1222 crore.

Going Ahead- FY26 would be muted but strong momentum is expected in FY27 as the company is building a strong US pipeline for the US market in the niche areas of respiratory, anti-cancer and peptides with 10-15 launches starting from H2FY26 onwards.

We believe these are high-margin low competition products which is expected to steer the US momentum for FY27 and beyond.

For India, the strategy is to push the growth via three channels- prescription, consumer health and trade generics. The management expects higher than industry growth.

For Africa, the strategy is to focus on new launches and a shift from B2B to B2C.

Besides launch momentum across geographies, the inherent advantage with Cipla is its strong pedigree in the niche Respiratory therapy which accounts for 30% of the consolidated sales.

We have a BUY rating on Cipla with a target price of ₹ 1780.

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