BLOG
Cipla Q4FY22 Review: Revenue momentum continues but one-offs, macros hurt margins
What’s Buzzing
Cipla’s Q4FY22 revenues were better than I-direct estimates while margins were a significant miss as there was a one-time expense of Rs 200 crore in this past quarter.
Context
Revenues grew 14% YoY to Rs 5260 crore led by 21% YoY growth in domestic formulations to Rs 2183 crore due to traction across branded prescription, trade generics and consumer health. US grew 21% YoY to Rs 1209 crore owing to strong traction in respiratory portfolio as well as contribution from peptide assets. EBITDA margins was down 303 bps YoY to 14.3% while EBITDA de-grew 6% YoY to Rs 750 crore. Subsequently, PAT was flat YoY at Rs 410 crore.
Our Perspective
Margins were impacted in Q4FY22 due to, 1) one-time Rs 200 crore write-off for Covid inventory, 2) higher R&D expenditure (up 16% YoY), 3) elevated freight cost and 4) seasonality mix in sales. Adjusted for one-time Rs 200 crore expense, margins were at 18%. Going ahead, margins are expected to fall back to the 21-22% range. Operationally, Cipla’s One-India has witnessed strong execution across portfolio and distribution synergies across branded prescription, trade generics and consumer health. In South Africa continues to maintain leadership positions in key therapy areas and in US market share gain for respiratory drugs along with ramp-up for first peptide asset bodes well, considering expected complex launches for US in H2FY23 will further strengthen overall business and profitability trajectory.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
Related content
Blogs
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Articles - Stocks
Advantages and Disadvantages of NPS
It is a long established fact that a reader will be distracted by the readable content of a page when looking at it...
Video
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.
Video - Stocks
What is Book Value?
Book Value Explained – Find out what is book value in stocks in this video by ICICIdirect.com.