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Business News/ Markets / Stock Markets/  Cipla share price down more than 2%: should you BUY, Sell or Hold the stock post Q3 earnings ?
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Cipla share price down more than 2%: should you BUY, Sell or Hold the stock post Q3 earnings ?

Stock Market Today: Cipla had reported strong Q3 performance with net profit at ₹1,049 crore rising 32.7% y-o-y. The margins expanded 260 basis points. The strong India and US performance led to the good Q3 show. Know what brokerages are saying post Cipla's Q3 earnings performance

Cipla Share prices declined more than 3% in morning trades. Know what Brokerages are saying post Cipla's Q3 earnings performance (REUTERS)Premium
Cipla Share prices declined more than 3% in morning trades. Know what Brokerages are saying post Cipla's Q3 earnings performance (REUTERS)

Cipla share price declined more than 3% in the morning trades on Monday. It was amongst the largest losers in the Nifty-50 stocks on a day when benchmark indices gained around 0.8%.

Cipla had reported a resilient performance in the December quarter last week, that was supported by strong growth in both India and the US markets. India sales at 2,859 Crore contributing more than 40% to overall revenues grew 11.6% y-o-y. North American sales at 1,916, contributing almost 30% to overall revenues also grew 19.8% y-o-y. It was the highest ever quarter at $ 230 million at 18% YoY growth supported by continuing momentum in key assets and robust demand in base business along with some year-end buying.

This meant that overall revenues for Cipla at 6,544 crore could grow 14.2% y-o-y. Its Earnings before interest tax depreciation and amortisations (Ebitda) at 1,720 crore grew 24.9% y-o-y. The Ebitda margins at 26.3% expanded 230 bps while reported net profit at 1,049 crore also grew 32.7% y-o-y.

Know what Brokerages are saying-

HSBC Securities and Capital Markets (India) Private Ltd have retained Buy ratings on Cipla and raised their target price to 1,500 (from 1,485). They say that the traction in lanreotide 505b2, generics of Revlimid and launches to help US sales. Lanreotide is a drug used for management of acromegaly and symptoms caused by neuroendocrine tumors, Revlimid is a multiple Myeloma treatment drug.

Motilal Oswal Financial Services Ltd remain positive on Cipla on the back of  respiratory and peptide asset build-up for the North American market, robust brand franchise in domestic formulations, and scope for inorganic growth given surplus cash of 7500 Crore as of 3Q-end. They Retain BUY ratings on Cipla with target price of 1600.

Nuvama India Equity research  said that Cipla has multiple growth drivers beyond limited generic Revlimid cash flow.  Cipla's India business growing steadily across channels. Generics of Abraxane and Advair and 4 peptide launches in FY25/FY26 will boost US revenue. Filing of Symbicort and other inhalation assets will keep US steady post FY26. Top-notch execution and sticky revenue call for a premium valuation. They have thus raised the core business multiple to 29 times (from 27 times). They have raised FY24 estimated earnings per share by 6% and  FY25 estimates remain largely unchanged.  They  maintain ‘BUY’ ratings with a target price of 1,600 (earlier- 1,350).

Jefferies India Pvt Ltd  maintain a Hold rating on Cipla with a revised price target of 1,250 from Rs1,210.  Jefferies analysts say that Cipla 3QFY24 adjusted Sales and Ebitda beat our estimates by 5% and 6% respectively on higher sales in North America and SAGA region (South Africa, Sub-Saharan Africa and Cipla Global Access). They expect steady growth for India and Rest of the World markets but say that growth for the US over the next two years will depend on timely launches of five peptide products (which need more color) as big ticket launches like generics of Abraxane and Advair are facing further delays.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

 

 

 

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 29 Jan 2024, 09:53 AM IST
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