Analyst Concall
With huge cash in hand, Cipla eyes pdt buyouts in India, US
This story was originally published at 20:03 IST on 29 October 2024
Register to read our real-time news.Informist, Tuesday, Oct. 29, 2024
--Cipla: Continue to invest in company's field force to drive growth
--CONTEXT: Cipla management comments in post-earnings analyst call
--Cipla: Focussed on top 20 cities in Africa region for new launches
--Cipla: Expect China plant to commence operations FY25
--Cipla: Looking for products, portfolio acquisition in India, US
--Cipla: Looking to use cash reserves for inorganic growth opportunities
--Cipla: Looking to buy injectables assets in US
--Cipla: Trade generics business in India to recover in coming quarters
By Narayana Krishna and Jahanvi Kothari
HYDERABAD/MUMBAI – With nearly a billion dollar cash in hand, Cipla Ltd is eyeing to buy product portfolios in India as well as in the US to drive growth, the company's management said in a post-earnings conference call Tuesday. As on Sept. 30, Cipla reported its cash reserves at INR 79.5 billion.
The company on Tuesday, reported a 15% year-on-year rise in its consolidated net profit to INR 13.03 billion for the September quarter, its lowest growth in the last six quarters. The earnings were hit by slow growth in India and a lower-than-targetted growth in North America. Revenues for the quarter increased 5.6% on year to INR 70.51 billion. Both, net profit and revenue were above the Street's estimates.
Asked about plans for utilisation of cash reserves, the company's management said the immediate priority is to drive growth in India, which includes in-organic growth opportunities. Cipla is also looking for strong products with a potential to generate sustainable revenues in the US as part of its acquisition plans. The management said US injectables portfolio is one of the areas that the company is focused on for buyouts.
Cipla expects to commence its China plant operations in the current financial year. The company attributed the rise in its other expenses in Jul-Sept to spending on China plant operations. The investment made to improve the trade generics business in India was also another reason for increase in other expenses. For Jul-Sept, Cipla reported 8.72% on year rise in Jul-Sept other expenses to INR 16.74 billion.
Cipla's management said it will continue to invest in its field force to drive future growth. Currently, the company has a field force of nearly 8,700.
On Africa operations, the company is focused on top 20 cities in the region for its product launches to drive growth. For Jul-Sept, Africa region sales rose 24% on year to INR 10.68 billion.
On Tuesday, shares of Cipla ended at INR 1477.55, down 1.7% from its previous close. End
Edited by Vandana Hingorani
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