Cipla expects US sales ramp-up in FY27, maintains full year guidance

Cipla, which posted its financial results for the June quarter on Thursday, saw its profits dip 39% over softer US sales. However, the company expects sequential sales momentum in the US, driven by new launches in the coming quarter, chief executive Achin Gupta said.

“Our pipeline for the year is very promising. It includes several significant launches, particularly comprising three respiratory assets and one key peptide opportunity, which we keenly look forward to in terms of approvals and launches,” Gupta told reporters in a post-results press conference.

Cipla’s net profit for the quarter fell 39% year-on-year to ₹789 crore, due to an absence of two key products, lenalidomide and lanreotide, compared to the previous year. “The dip is there this time, and new products are still catching up,” he said, adding that the drugmaker was seeing improvements sequentially.

Its revenue for the quarter grew marginally by 2% to ₹7,119 crore, while Ebitda declined 33% to ₹1,192 crore, and margins shrank from 25.6% to 16.7%.

The company’s India business registered its highest revenues, with 12% y-o-y growth to ₹3,452 crore. The domestic business accounted for nearly half of its overall revenues. “In our branded prescription business, we continue to witness strong momentum across our chronic portfolio, delivering market-beating growth of 15.4% during the quarter,” said Gupta.

US growth

The US business posted revenue of $162 million. “We're expecting buildup through the coming quarters as we get these big product approvals and as we're able to ramp up the supplies on each of these products,” said Gupta.

The company is maintaining full-year Ebitda margin guidance of 18.5-20% with US sales at a run rate of $1 billion by the end of the fiscal year.

US is its second-largest market, accounting for 22% sales. Commenting on US President Trump’s plan to introduce phased tariffs on generic products in 2028 to encourage onshoring, Gupta said that 35-40% of their manufacturing already comes from the US.

“But the US also remains a very large market opportunity. So, the question is more around how do we continue to serve the market in US and the patients in US and provide high-quality, affordable care,” he said, adding that the firm is awaiting more clarity on the issue. “We have experience in doing that [manufacture locally], so I think whichever way it moves, we will be able to adapt,” he said.

Cipla's stock price closed 1.42% lower at ₹1,395 apiece on the National Stock Exchange on Thursday.