Home / Markets / Mark To Market /  Cipla’s decent Q2 performance provides confidence on forward prospects
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NEW DELHI : Cipla Ltd pulled out a decent Q2 performance despite a decline in sales of covid-19 drugs. The India business growth of 16% year-on-year (y-o-y) provided the positive impetus. Adjusted for covid-19 product contribution, the growth came in at 23% as per analysts. The respiratory, urology, anti-infective and cardiology portfolios helped the company’s India sales.

Sales in South Africa also maintained a steady growth momentum. South Africa, sub-Saharan Africa and Cipla Global Access (SAGA) grew 8% y-o-y in US dollar terms.

Both India and SAGA performance pulled the company's Q2 show up as US sales revenues, though impressive at $142 million, marked only marginal growth. Steady momentum in core products was able to offset price erosion in the rest of the portfolio.

The company’s consolidated sales grew 10% y-o-y while ebitda and net profit grew 4% and 7% respectively. Analysts at Nomura Research said that “Q2FY22 results came in ahead of our expectations". The sales/ebitda/net profit was 9%/13%/11% above their estimates. Ebitda stands for earnings before interest, tax, depreciation, and amortization.

Analysts feel that the company’s forward prospects hold promises. The strong chronic portfolio of the company in India business already is growing well, while a rebound in the acute segment should support growth. The company also recently had announced licensing of insulin brands Humalog and Trulicity from Eli Lilly. These products have annualized revenues of 230 crore according to analysts.

In the US, the albuterol inhaler generic sales are growing well. The company has garnered more than 15% market share in the US market. The US albuterol market remains steady in terms of demand and pricing, say analysts, and this is a big positive. The good growth in albuterol inhaler sales, coupled with new launches, is taking care of pricing pressure in the US base business. Meanwhile, the analysts feel that rising clarity on launch timeline for larger products in the US market is likely to improve earnings outlook

In view of the good line-up of sizeable launches in FY23 (generics of Revlimid, Abraxane and potentially Advair), analysts at HSBC Securities and Capital Markets (India) Pvt. Ltd, expect US sales to accelerate significantly from H2FY23. They expect its US sales to be in the $140 million- 150 million range for the remaining quarters of FY22, backed by the scale-up of respiratory sales and improving reach in channels"

The Cipla stock was trading more than 1% in morning trades on Wednesday.

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