Home / Markets / Stock Markets /  This Indian pharma stock is Jefferies' top pick, target price raised

Cipla’s upcoming launches and pipeline look strong with several high-value products likely to be launched in the next 6-9 months. A review of inhaler and peptide space indicates both of these are less chartered territories by generics where Cipla has US filings, said global brokerage Jefferies in a note. 

“We revise our US sales and margin estimates for Cipla given strong product launches on the horizon. Our FY23/24 EPS changes by +4%/3%," the note stated. The brokerage has maintained its Buy rating on Cipla shares with a target price of 1,223 apiece (from 1,144) and said it remains its top stock pick in India pharma generics

“We revise Cipla's US sales estimates for FY24 to $769 m from earlier $736 m and revise FY24 EBITDA margin to 24.2% from 23.3% primarily factoring the growth from the key product launches coming up in the next few quarters. We believe there is still upside to our estimates due to the differentiated launch pipeline," it added.

During 1QFY23 Cipla gave a hint on its key US pipeline products that comprised 5 respiratory assets, 2 complex generics and 5 peptide injectables.

The known respiratory assets where Cipla has already filed for USFDA approval are the generic versions of Qvar and Advair Diskus. Generics assets for the company are gAbraxane and gRevlimid and among peptides Cipla has filed for Vasopressin. Most of the assets are set for launch in coming 1-2 years, with gRevlimid, gAdvair and gAbraxane expected in 2HFY23.

“An analysis of respiratory inhalers shows that only select generic firms are active in the space, and it is key to partner with a device maker to crack the code. Generic firms that are most active in the space are Teva, Viatris, Cipla, Lupin and Hikma. Cipla is focusing on Advair Diskus which is a $700 m market in the US and Lupin is targeting Spiriva handihaler in the inhaler segment. Cipla, Lupin and Lannett are the other firms in the race to launch gAdvair but we don’t expect Lupin’s launch anytime soon," Jefferies added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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