Reinvestments will contribute to a better performance and result in a spike in sales and profit, but in the long term
The fall in Cipla Ltd’s profitability may be viewed warily by investors, but the company believes this is an outcome of it reinvesting profits to achieve its long-term business goals. That is a justifiable objective. But investors like to have it all and that translates to sustained sales and profitability growth, even in the short run. They might be in for disappointment, unless Cipla pulls out an unexpected rabbit from its hat.