Earnings Outlook
Cipla likely to see lowest consol PAT growth in 12 qtrs
This story was originally published at 10:25 IST on 24 July 2025
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By Narayana Krishna
HYDERABAD - Cipla Ltd. is expected to report its lowest profit growth in the last 12 quarters due to a weak pricing environment in the US and moderate sales growth in India. The pharma company has consistently posted a net profit growth ranging from 10% to 79% year-on-year for the last 11 quarters in a row. According to analyst estimates, profit growth is now expected to shrink to single digits for Apr-Jun.
Cipla's consolidated net profit for the June quarter is likely to grow only 4% on year to INR 12.3 billion, according to an average of estimates from 10 brokerages. Revenue is expected to rise 5% on year to INR 70.3 billion, the estimates show.
JM Financial Institutional Securities Pvt. Ltd. has the highest net profit estimate of INR 13.8 billion while Nuvama Wealth Management Ltd. has the lowest estimate of INR 11.4 billion. The revenue estimates are in a range of INR 68.8 billion by Systematix Shares and Stocks India Ltd. to INR 71.6 billion by Dolat Capital Market Pvt. Ltd.
Cipla will announce its earnings for the quarter ended June Friday.
Analysts expect erosion of pricing for Revlimid, Cipla's generic cancer drug, to weigh on its US performance for the reporting quarter. Cipla is one of the eight generic companies competing for market share with their respective versions of the drug. The pharma player has booked significant revenue from Revlimid over the past several quarters. Despite pricing pressure, an improvement in supplies and sales of the hormone-controlling drug Lanreotide may partially offset a downward impact, according to analysts. On the domestic front, analysts anticipate moderate growth due to weakness in respiratory and anti-diabetic therapies.
India contributes nearly 40% to Cipla's total sales while the US accounts for over 30%, South Africa over 12%, and Europe and emerging markets make up the rest.
US PRICE EROSION
Analysts expect Cipla to witness price erosion in its key products — Revlimid, Albuterol, and Lanreotide — which will drag revenue growth and margin. Motilal Oswal Financial Services Ltd. has projected a 13% on-year fall in Cipla's US revenue for the June quarter to $218 million, because of reduced pricing of Revlimid. Limited product approvals in the US are also expected to impact performance for the quarter, the brokerage said.
Centrum Broking expects a 12?ll and JM Financial sees an 8?cline in the company's US revenue for the reporting quarter. Kotak Institutional Equities sees the company's US sales for the June quarter flat sequentially at $221 million while Revlimid's contribution for the quarter is seen at $50 million against $55 million a quarter ago.
ONE INDIA – ONE AFRICA
Most analysts expect Cipla to report single-digit revenue growth in India and double-digit growth in South Africa for Apr-Jun. While reporting its financials, Cipla classifies its domestic business as One India, a combination of trade generics, branded generics, and the consumer health business. For the Africa region, South Africa's front-end retail, tenders business, and the rest of Africa are classified as One Africa.
According to Kotak and Nuvama Wealth, Cipla is expected to report a 9% on-year revenue growth for the June quarter in India, aided by momentum in key therapies like cardiac, respiratory, and anti-infective segments. Motilal Oswal, Prabhudas Lilladher, and Nirmal Bang see the company's India revenue rising 8–9% on year on a low base and recovery in some key therapies. Systematix believes Cipla will likely see double-digit growth in India for Apr-Jun, led by strong performance in cardiac and respiratory products.
Kotak said Cipla is expected to report 16% on-year revenue growth under One Africa while standalone South Africa sales may see 15% on-year growth for the June quarter. JM Financial sees 10–12% growth in South Africa revenue.
MARGIN PRESSURE
Analysts expect pricing pressure and higher research and development spend to drag Cipla's earnings before interest, tax, depreciation, and amortisation margin for the June quarter. Kotak has projected the company's EBITDA margin to decline by 130 basis points to 24.3%. Estimates from 10 brokerages show the pharma player's absolute EBITDA to remain flat on year at INR 17.2 billion. Estimates from eight brokerages for Cipla's Apr-Jun EBITDA margin were in the range of 23.5% to 25.0%.
Market participants will watch for the company's outlook on glucagon-like-peptide-1 products in India and other key launches in the US. Analysts will also track the status of the company's regulatory issues in its Indore plant.
Of the 18 research reports available on the company with Informist, 13 have a 'buy' or equivalent rating on the stock with an average target price of INR 1,713. Two have a 'hold' rating on the stock with a target price of INR 1,575 and three have a 'sell' rating with a target price of INR 1,395.
Cipla's shares have fallen 3% since the announcement of its March quarter earnings on May 13. At 1021 IST, shares of the company were at INR 1,473.40 on the National Stock Exchange, flat from the previous close.
Following are the Apr-Jun earnings estimates for Cipla, based on reports from 10 brokerage firms in the descending order by the estimate of net profit:
|
Brokerage name |
Net Sales |
Net Profit |
EBITDA |
|
|
--in million rupees-- |
||
|
JM Financial Institutional Securities Pvt. Ltd. |
70,495.00 |
13,805.00 |
18,345.00 |
|
Nirmal Bang Equities Pvt. Ltd. |
70,942.00 |
12,637.00 |
17,594.00 |
|
Dolat Capital Market Pvt. Ltd. |
71,561.00 |
12,533.00 |
17,503.00 |
|
Systematix Shares and Stocks (India) Ltd. |
68,844.00 |
12,503.00 |
16,956.00 |
|
Antique Stock Broking Ltd. |
71,044.00 |
12,123.00 |
17,792.00 |
|
Motilal Oswal Financial Services Ltd. |
69,334.00 |
12,087.00 |
16,293.00 |
|
Centrum Broking Ltd. |
70,000.00 |
12,000.00 |
17,000.00 |
|
Kotak Institutional Equities |
70,611.00 |
11,953.00 |
17,168.00 |
|
Prabhudas Lilladher Pvt. Ltd. |
69,593.00 |
11,905.00 |
16,819.00 |
|
Nuvama Wealth Management Ltd. |
70,073.00 |
11,398.00 |
17,150.00 |
|
Average |
70,249.70 |
12,294.40 |
17,262.00 |
End
US$1 = INR 86.33
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Nishant Maher
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